Main takeout:
Increasing bond yields increases fiscal stability and concerns about inflation, and some investors question the traditional role of the Treasury as a safe asset.
Bitcoin ignores the increasing conventional dangerous model because the macroscopic conditions are deteriorating.
Bitcoin (BTC) has risen to a new height in the background of the world’s macro economy. Bond yields are rapidly increasing in the United States and Japan, global growth is stopping, and consumer trust in the United States is scraping the lowest point.
Paradoxically, the very macroscopic conditions that once threatened the price of Bitcoin are now rising. Change refers to how investors interpret risks and wider changes in places where she finds a shelter. At the center of this relocation is the US debt crisis and balloon financial yield, which was once considered the safest asset in the world.
Why is US financial harvest so important?
As the US bond yield increases, the cost of raising national debt increases rapidly. The US debt is expected to exceed $ 36.8 trillion and Aza’s payment will exceed $ 95.2 billion in 2025.
US President Donald Trump clearly stated that lower returns were one of his economic priorities. But the two most reliable ways to achieve this can be much more difficult than expected because they have to come out of the US Federal Reserve Bank. The lower the interest rate, the less newly issued bonds will be more attractive to increase the price and lower the effective yield. Another way is to quantitatively relax (QE), and the Fed purchases a large amount of bonds in the open market to increase demand and lower yields.
The Federal Reserve Bank is currently resisting two strategies, especially in the tariff war, not to rule inflation. Even if Trump finds a legitimate or given reggal path that puts pressure on the Fed Chairman Jerome Powell, it can be counterproductive by eroding the investor’s trust and creating an opposition to the intended effect.
Investors do not recognize the political confusion of the basics of the United States and the world economy, and their trust is already broken. In an instability, investors are traditionally a safe shelter and flock to government bonds. But today, the vice versa is happening. Investors are moving away from the treasure and suggest that the problem of the US economy is not too big. The recent loss of the last AAA credit rating by the US government is certain confirmation.
The worried yield of the United States and Japan increases rapidly
On May 22, the US 30 -year bond yield was 5.15%since October 2023, and before that, it was not seen since July 2007. The 10 -year yield is currently 4.48%, the five -year return is 4%, and the two -year return is 3.92%.
For the first time since October 2021, bond spreads from five to 30 to 30 years have surged to 1.00%. This suggests that the market is priced in stronger growth, continuous inflation and “longer” ratio.
relevant: Bitcoin prices have a new record, and the data shows that BTC BULLS has not been completed yet.
It is Japan, the largest foreign holder in the United States. Japanese investors currently have $ 1.13 trillion in US government debt and $ 35 billion more than China. For decades, Japanese institutions have borrowed cheaply at home and invested in US bonds and stocks.
This era can be over. In March 2024, the Bank of Japan began to raise interest rates from -0.1%to 0.5%. Since April, Japan’s 30 -year bond yield has increased by 100 Basis points, reaching a record high of 3.1%. The 20 -year bond yield has risen to 2.53%to the invisible level since 1999.
On May 19, Prime Minister Shigeru Ishiba warned that the government’s position on his council was “worse than Greece.”
Interestingly, the surge in long -term Japanese bonds did not match shorter maturity. The 10 -year bond yield is 1.53%and the five -year bond yield is only 1%. As Reuters pointed out, this suggests strategic changes by Japanese pensions and insurance funds as the Bank of Japan “normalizes” interest rates. These institutions can now re -evaluate both risks and foreign bond exposure, which causes potential problems for the US Treasury if they begin to solve their retention.
Does bond volatility continue to affect Bitcoin prices?
As the United States continues to lower its debt spirits, Japan can start itself, and the global economy is not close to recovery and can be a good sign for Bitcoin.
Traditionally, if bond yields rise, it will reduce risk assets. But stocks and Bitcoin continue to climb. This divergence suggests that investors may be far from traditional playbooks. When trust in the system is eroded, external assets, such as stocks and bitcoins, begin to shine even if they cause danger.
In addition, more and more institutions choose Bitcoin between Bitcoin and US stocks. According to BOFA, as pointed out by the Kobeissi letter, 38%of institutional investors are undergoing US stocks in early May, the lowest US stocks since May 2023.
Meanwhile, according to CoingLass, the total inflow to SPOT BITCOIN ETF continues to increase, and management’s assets are currently the highest at an all -time high, exceeding $ 104 billion. This surge suggests that institutional capital has begun to recognize Bitcoin as a politically neutral value storage similar to gold, as well as gold. In the age of strengthening instability in the Fiat debt -based economy, Bitcoin has emerged as a reliable alternative to provide a financial system based on predictability and decentralization. The market cap is still much lower than the $ 22 trillion of gold or much lower than the $ 5.5 trillion in basic dollars (excluding debt), so Bitcoin is still undervalued.
Interestingly, the current situation supports all of Bitcoin’s competitive stories. This acts as a high -profit risk asset and a safe value storage. In a world where old frameworks fail, Bitcoin’s double role can be a sign of future, not more than anymore.
This article does not include investment advice or recommendation. All investment and trading measures include risks, and the reader must do his own research when making a decision.