AI Debt Surge Pushes Treasury Yields Higher, Pressuring Bitcoin

Bitcoin is trading near $63,517, down 46.1% over the past 12 months, while gold has gained 32.6%. That nearly 79-percentage-point performance gap highlights a growing challenge for Bitcoin: surging bond yields fueled partly by the artificial intelligence investment boom.

US technology companies have dramatically increased borrowing to finance AI infrastructure. According to JPMorgan Asset Management, tech firms historically issued about $61 billion in bonds annually based on the previous five-year average. Issuance jumped to $131 billion in 2025 and reached $192 billion by late July 2026.

Tech companies now represent 27% of net US investment-grade bond issuance. Nomura Securities estimates Big Tech borrowing has grown to roughly 25% of Treasury net bond sales to private investors, creating more competition for capital among corporations and the US government.

That competition can push yields higher, making interest-free assets such as Bitcoin less attractive. The 30-year Treasury yield reached 5.25% on August 14, its highest level of 2026, while the 10-year Treasury yield climbed to 4.68%. Bank of America economists estimate corporate and mortgage bond supply contributed around 0.3 percentage points to this year's increase in the 10-year yield.

Corporate bonds offer even higher returns. Alphabet recently priced 30-year debt around 6.4%, while bonds financing a Meta data center yielded more than 7.5%. Investors can therefore earn substantial income from highly profitable technology companies without taking Bitcoin's volatility risk.

The borrowing wave could intensify. JPMorgan Asset Management projects approximately $5.5 trillion in AI capital expenditure through 2030, including $2.1 trillion financed through new bonds. Barclays expects net corporate bond supply to increase by $474 billion this year.

Meanwhile, US government borrowing remains elevated, with the federal deficit reaching $1.8 trillion during the first 10 months of fiscal 2026.

Bitcoin's scarcity narrative traditionally benefits from concerns over government debt and monetary expansion. But with Treasury and corporate bond yields offering attractive returns, capital has increasingly favored yield-producing assets and gold. Upcoming long-term Treasury auctions could reveal whether investor demand is strong enough to absorb both America's expanding debt needs and the AI industry's massive borrowing spree.