AI debt lifts 30-year Treasury yield to 5.27% as Bitcoin slides

The US government now pays 5.27% to borrow for 30 years, the highest rate of 2026, and AI companies are a large part of the reason.

Bitcoin trades near $63,517, down 46.1% over the past 12 months, as the 30-year Treasury yield hit 5.27%, the highest level of 2026. Gold rose 32.6% in the same stretch, leaving a gap of almost 79 percentage points between the two assets.

"Whoever's issuing, be it a government or a hyperscaler or a non-hyperscaler credit, is now competing with more borrowers. And therefore yields have to be higher," Tony Rodriguez, head of fixed-income strategy at Nuveen Asset Management, said.

US technology companies sold $192 billion of bonds by late July, up from $131 billion in all of 2025 and a five-year average of $61 billion, JPMorgan Asset Management said in July. The sector now accounts for 27 percent of all net investment-grade bond sales, while total US corporate issuance reached $1.68 trillion through July, according to the Securities Industry and Financial Markets Association. Nomura Securities estimates Big Tech borrowing now equals roughly 25 percent of Treasury net bond sales to private investors, five times the share a year ago.

The mechanism is simple: bonds pay interest, Bitcoin does not. The 30-year Treasury yield closed at 5.25% on Aug. 14, its highest level this year, Treasury Department data show, with the 10-year at 4.68%, up 0.49 percentage points since Jan. 2. Bank of America economists attribute about 0.3 of that rise to corporate and mortgage bond supply, meaning new debt explains roughly 60 percent of the move in the 10-year this year.

AI Borrowing Now Competes With the US Treasury

Corporate paper pays even more. Alphabet priced 30-year debt near 6.4 percent recently, about 1.15 points above comparable Treasuries, Bloomberg reported. A bond financing a Meta data center paid over 7.5 percent last month. An investor can now earn 6 or 7 percent from two of the world's most profitable companies — the bar Bitcoin's price performance must clear. It has not cleared it since global bond yields climbed to 2008 levels.

The Treasury Cannot Sidestep It

Treasury Secretary Scott Bessent has tried to protect long-term rates by selling more short-term debt instead. Barclays estimated the shift would cut net supply of new Treasury notes and bonds by $440 billion this year. AI borrowing filled that space and more: Barclays expects net corporate bond supply to grow by $474 billion, most of it from the tech giants.

Washington is not borrowing less either. The federal deficit hit $1.8 trillion in the first 10 months of fiscal 2026, $169 billion more than last year, the Congressional Budget Office said. Rising US debt interest costs add to it. JPMorgan Asset Management projects $5.5 trillion of AI capital spending through 2030, with $2.1 trillion of that coming from new bonds.

"That is a crowding-out effect. It is important to remember that we are just starting. This hyperscaler debt issuance story has really just begun," Greg Peters, co-chief investment officer at PGIM, said.

Endless borrowing is the core of the Bitcoin scarcity argument. This year the argument has not paid. Gold took the money, and the 30-year Treasury yield record shows why. The next long-end auctions will test whether buyers have room for both.

This article is for informational purposes only and does not constitute investment advice.