Bitcoin (BTC) has reached new heights amid a fragile global macroeconomic environment. While bond yields soar in the US and Japan, global growth slows, and US consumer confidence drops to near-record lows, Bitcoin’s price continues to climb—reflecting a shift in how investors view risk and safe havens.
The Rising Importance of US Treasury Yields
US Treasury yields have become a critical focus as rising yields increase the cost of servicing the nation’s debt, which has now exceeded $36.8 trillion. Interest payments are projected to reach $952 billion in 2025, highlighting the financial strain. Despite former President Donald Trump’s repeated calls to lower yields, the task remains challenging. The Federal Reserve controls the main levers for reducing yields—cutting interest rates or pursuing quantitative easing (QE) by buying bonds—but it has been cautious to avoid stoking inflation amid ongoing trade tensions.
Attempts to pressure the Fed could backfire, undermining investor confidence at a time when faith in government bonds—the traditional safe haven—is already wavering. The US government’s recent loss of its AAA credit rating underscores these concerns.
Yield Surge in the US and Japan Raises Alarms
On May 22, the US 30-year Treasury yield hit 5.15%, the highest since 2007, while the 10-year, 5-year, and 2-year yields stood at 4.48%, 4%, and 3.92%, respectively. The widening 5-year to 30-year yield spread signals market expectations for stronger growth, persistent inflation, and a prolonged period of higher interest rates.
Japan, the largest foreign holder of US Treasurys with $1.13 trillion, is also facing its own debt challenges. The Bank of Japan’s recent rate hikes—from -0.1% to 0.5%—have pushed 30-year bond yields to a record 3.1%, with the 20-year yield climbing to levels unseen since 1999. Prime Minister Shigeru Ishiba’s stark warning that Japan’s debt situation is “worse than Greece” adds to the unease.
Interestingly, long-term bond yields in Japan have surged, while shorter maturities remain relatively stable, indicating a strategic shift among Japanese institutional investors. As the Bank of Japan normalizes rates, pension and insurance funds may reevaluate their exposure to foreign bonds, potentially triggering large-scale US Treasury sell-offs.
What Does This Mean for Bitcoin?
Despite rising bond yields traditionally pressuring risk assets, Bitcoin and stocks have continued their ascent, signaling a break from conventional investing patterns. With growing doubts about the US and global economies, investors increasingly see Bitcoin as a refuge.
Institutional interest in Bitcoin is rising. According to recent data, 38% of institutional investors were underweight US equities as of early May 2025—the lowest level since May 2023. At the same time, inflows into spot Bitcoin ETFs have surged, with assets under management topping $104 billion, a new record.
This trend suggests that institutions view Bitcoin not only as a high-performing speculative asset but also as a politically neutral store of value—akin to gold—in an era marked by instability in fiat debt-based systems. Despite its growth, Bitcoin’s market capitalization remains far below gold’s $22 trillion and the US dollar’s base money supply, indicating significant upside potential.
Bitcoin’s Dual Role: Risk Asset and Safe Haven
Today’s economic environment supports Bitcoin’s unique position as both a high-yield risk asset and a safe haven. This duality, once considered contradictory, may become a defining feature of Bitcoin’s future role in the financial system.
