Bitcoin has surged to new heights amid a tumultuous global economic environment, with U.S. and Japanese bond markets in flux. As of May 2025, rising yields in key government bonds are shaking investor confidence, driving a surprising shift toward Bitcoin as a perceived safe haven.
Bond Market Turbulence
The yields on U.S. Treasury bonds have soared, with the 30-year bond recently hitting 5.15%, its highest level since October 2023. This yield surge underscores burgeoning concerns over fiscal stability and inflation, raising the cost of servicing the United States’ staggering $36.8 trillion debt. Interest payments alone are projected to reach $952 billion this year.
The Federal Reserve, under pressure from President Trump to lower yields, faces a conundrum. Traditional methods like reducing interest rates or implementing quantitative easing risk reigniting inflation—a scenario the Fed is keen to avoid. As economist Sarah Thompson notes, “The Fed’s cautious stance reflects a delicate balancing act: they must manage inflation without undermining investor confidence.” This aligns with recent analyses suggesting that a US recession in 2025 is becoming the ‘base case’.
Japan, the largest foreign holder of U.S. Treasurys, is also experiencing a bond market shake-up. The Japanese government has been raising interest rates since March 2024, sending long-term bond yields to unprecedented levels. Prime Minister Shigeru Ishiba’s stark warning to parliament that Japan’s fiscal position is “worse than Greece” has only added to the unease.
Bitcoin’s Unexpected Ascent
In a twist of financial fate, the very conditions that historically posed threats to Bitcoin’s price now appear to be fueling its rise. As global investors reassess risk paradigms, Bitcoin is increasingly seen as both a high-yield asset and a safe haven. “Bitcoin is defying conventional risk models,” says crypto analyst Mark Jensen. “It’s thriving because of—and not despite—macroeconomic instability.” This sentiment echoes predictions that Bitcoin’s price is about to ‘blast’ higher as the odds of a Fed rate cut increase.
The recent loss of the United States’ last AAA credit rating has further shaken confidence in traditional safe-haven assets like Treasurys. This has contributed to Bitcoin’s allure, alongside the growing perception of it as a politically neutral store of value, akin to gold.
Institutional Shift and Market Implications
The shift in investor sentiment is not limited to individual speculators. Institutional capital is pouring into Bitcoin, with spot Bitcoin ETFs reaching an all-time high of over $104 billion in assets under management. This suggests that institutional investors are increasingly recognizing Bitcoin as a viable alternative to traditional equity markets, which have seen a net 38% of institutional investors underweight U.S. equities, a stark low since May 2023.
As noted by The Kobeissi Letter, the divergence between rising bond yields and the continued ascent of Bitcoin and equities signals a broader reevaluation of risk. “In times of systemic doubt, assets outside the traditional framework—like Bitcoin—begin to shine,” says Jensen.
A Dual Narrative
Bitcoin’s current trajectory supports both of its once-contradictory narratives: as a high-yield risk asset and a safe haven store of value. In a world where conventional frameworks are faltering, this dual role may no longer be an anomaly but a harbinger of what’s to come. As investors grapple with the implications of shifting economic tides, Bitcoin’s place in the financial ecosystem appears increasingly secure.
As the global economy continues to navigate these uncertain waters, the question remains: will Bitcoin’s rise persist, or is this a temporary refuge in a storm of fiscal instability? Only time will tell, but for now, Bitcoin’s defiance of traditional market dynamics is rewriting the script on risk and refuge.
Source
This article is based on: Bitcoin price expected to soar as global bond markets break — Here’s why
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
