Bitcoin Gains as Global Bond Market Shows Cracks
As global debt markets flash red, Bitcoin rallies strongly, defying norms and potentially redefining its role within the traditional financial system.
Key Takeaways
Rising bond yields hint at concerns about debt stability and inflation, causing some to rethink the traditional safety of US Treasury securities.
Bitcoin’s price growth seems linked to macro troubles — not despite them, but perhaps because of them, highlighting a changing investor mindset.
Bitcoin Climbs Amid Macro Worries
Bitcoin
BTC
$104,600
has rallied amid worsening macro data. US and Japanese bond yields are rising, growth is slowing, and American consumer confidence is near record lows.
Conditions once seen as bearish for Bitcoin now appear to fuel its rise. The shift reflects a rethinking of risk and safe-haven strategies globally.
Treasury Yields and Why They Matter
As yields on US bonds rise, so do debt service costs. With US debt over $36.8 trillion, interest payments may reach $952 billion in 2025 alone.
Trump had aimed to cut yields, but real solutions require Federal Reserve action. Rate cuts or QE could lower yields — but both risk sparking inflation again.
The Fed is holding firm on current policies, wary of reigniting inflation. Even political pressure from Trump might harm investor confidence further.
Treasurys No Longer the Safe Haven?
Investors are now backing away from US Treasurys instead of rushing to them. This signals deeper concerns about US fiscal credibility and growing debt risks.
The recent downgrade of the US government’s last AAA rating has intensified this doubt, hinting that some institutional investors may be losing faith.
Surging US Bond Yields Raise Alarms
On May 22, 30-year US yields reached 5.15%, the highest since 2023. The 10-year, 5-year, and 2-year bonds yield 4.48%, 4%, and 3.92%, respectively.
Bond Spread Signals Long-Term Concerns
The 5–30-year bond spread is now 1% — the highest since October 2021 — pointing to expectations for persistent inflation and strong growth pressures.
Japan’s Role in Treasury Stability
Japan, holding $1.13 trillion in US debt, is now raising its own rates. This marks the end of cheap capital and raises questions about future US bond demand.
Japan Faces Its Own Crisis
Since March 2024, Japan hiked rates from -0.1% to 0.5%. Long-term Japanese bonds are yielding more — 30-year bonds rose 100 bps to 3.1%.
20-year yields reached 2.53%, unseen since 1999. Prime Minister Shigeru Ishiba even claimed Japan’s fiscal state is now “worse than Greece.”
Yield Curve Steepening in Japan
Despite long-term bond surges, Japan’s 10-year and 5-year bonds yield only 1.53% and 1%, showing a shift in investment strategy by major institutions.
If Japanese funds reduce US Treasury exposure, this could significantly impact global demand for US debt and raise further yield pressures.
Will Bitcoin Benefit From Bond Volatility?
As US debt spirals and Japan faces fiscal reckoning, economic instability grows — yet Bitcoin is rising, defying traditional market expectations.
Stocks and Bitcoin rising despite higher yields suggests a shift from classic models. In crisis, these assets may appear more attractive despite risks.
Institutions May Favor Bitcoin
According to BofA, 38% of institutions were underweight in US equities by early May — the lowest since May 2023 — possibly reallocating toward Bitcoin.
Bitcoin ETFs Attract Record Capital
Spot Bitcoin ETFs now hold over $104 billion, the highest ever. This signals growing institutional belief in Bitcoin’s long-term value and neutrality.
Bitcoin as Gold’s Digital Counterpart
Bitcoin, with its capped supply and decentralized nature, offers a hedge against fiat instability. Yet its market cap is far below that of gold or even base dollars.
Bitcoin Balances Risk and Safety
Bitcoin now serves as both a growth asset and a safe haven. This dual nature may no longer be a contradiction — but the new norm for financial safety.