Maybe other countries just outpaced the U.S. on yields. But that’s not necessarily the case, not uniformly. EU heavyweight Germany’s 10-year is up 45 basis points this year, less than the U.S. move. Japan’s is up a striking 90 basis points, yet the yen recently slid to four-decade lows rather than strengthening as the old playbook would predict.
In short, higher yields are no longer the bullish read for FX. If anything, markets seem to be reading them as a warning sign, fiscal strain rather than fiscal strength.
And if that’s really what’s going on, it flips the usual bitcoin argument on its head. In a world where rising yields signal trouble, investors may start reaching for the things governments can’t simply print more of or debase. Hard assets like bitcoin and gold fit that bill.
Analysts have argued that the incoming financial repression, using low inflation-adjusted interest rates and currency debasement to work down the debt pile, is a bullish tailwind for BTC and gold.
As for today, the renewed weakness in the Dollar Index is offering positive cues to bitcoin, which traded near $77,700 as of this writing, up 0.8% since midnight UTC. Smaller tokens such as ARB and LIT have gained 20% and 12%, respectively, in 24 hours.
