FameEX Hot Topics | Bitcoin Price Set to Surge Amid Global Bond Market Turmoil

Bitcoin has surged to new highs amid growing instability in global financial markets. Soaring bond yields in the U.S. and Japan, slowing global economic growth, and record-low U.S. consumer confidence have all contributed to a shifting investment landscape. Traditionally, such macroeconomic turbulence would suppress Bitcoin prices. But now, these same forces are driving investors toward the digital asset, indicating a broader shift in how risk and safe havens are perceived.

At the heart of this shift lies the U.S. debt crisis. With national debt exceeding \$36.8 trillion and projected interest payments reaching \$952 billion in 2025, the cost of debt servicing is climbing rapidly. Rising U.S. Treasury yields, once a symbol of safety, are now a cause for concern. Investors increasingly view government bonds as risky, prompting a move toward alternative stores of value like Bitcoin. The rapid ascent in yields has made holding U.S. debt less attractive and has deepened concerns about fiscal sustainability.

President Trump has repeatedly emphasized the need to lower bond yields, but the tools to achieve this lie primarily with the Federal Reserve. The Fed could cut interest rates or resume quantitative easing (QE) to reduce yields, but both options carry the risk of reigniting inflation—especially in the current environment of ongoing tariff wars. While Trump could seek to pressure Fed Chair Jerome Powell into action, doing so could destabilize markets further by undermining institutional independence and investor trust.

Investor confidence is already fragile, as evidenced by the market's reaction to recent developments. The U.S. 30-year bond yield reached 5.15% on May 22—the highest since October 2023 and levels last seen in 2007. The yield curve has steepened, with the 5-year to 30-year spread reaching 1.00% for the first time since 2021. This reflects expectations of enduring inflation, resilient growth, and a prolonged period of elevated interest rates, reinforcing the perception that traditional fixed-income assets are no longer safe.

Meanwhile, Japan, the largest foreign holder of U.S. Treasurys, is undergoing its own bond market upheaval. The Bank of Japan’s recent rate hikes have pushed long-term bond yields to multi-decade highs. Prime Minister Shigeru Ishiba’s warning that Japan’s fiscal condition is “worse than Greece” underscores growing debt concerns. Japanese pension and insurance funds appear to be shifting their strategies, reducing reliance on U.S. debt—further weakening demand for Treasurys and amplifying global investor moves toward assets like Bitcoin.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.