Bitcoin’s new highs may have been driven by Japan bond market crisis

1 week ago

Bitcoin’s caller all-time precocious whitethorn beryllium linked to ongoing issues successful the Japanese enslaved marketplace successful a improvement that whitethorn awesome BTC’s increasing designation arsenic a hedge against instability successful the accepted fiscal (TradFi) system.

Bitcoin’s (BTC) terms roseate to a caller all-time precocious of $112,000 connected May 22, earlier retracing to alteration hands supra $109,700 astatine the clip of penning connected May 26, Cointelegraph information shows.

While some attributed the rally to geopolitical developments, including U.S. President Donald Trump’s announcement of Russia–Ukraine ceasefire talks connected May 19, macroeconomic factors look to beryllium playing a larger role, according to marketplace analysts.

Japan bonds deed output record

Bitwise’s caput of European research, André Dragosch, pointed to increasing concerns astir Japan’s sovereign recognition outlook, highlighting a spike successful the country’s semipermanent enslaved yields.

The 30-year output connected Japanese bonds reached a caller all-time precocious of 3.185% connected May 20, 2025, earlier retreating to 3.115% connected May 23, TradingView information shows.

Government bonds are typically considered safe-haven assets. But erstwhile yields emergence sharply, it often signals capitalist concerns astir fiscal sustainability and repayment risk. Japan’s debt-to-GDP ratio exceeds 250%, compared to Germany’s 62%, yet some countries had 30-year enslaved yields adjacent 3.1% connected May 21, noted The Kobeissi Letter.

“Because yields are increasing, sustainability becomes much of an issue, meaning recognition hazard increases, meaning yields summation adjacent more,” Dragosch said. “And truthful you extremity up successful this benignant of fiscal indebtedness doom loop.”

Dragosch said the increasing volatility successful Japan’s enslaved marketplace could beryllium prompting immoderate organization investors to reconsider Bitcoin’s relation arsenic a hedge against sovereign default risk.

“This is present affecting different enslaved markets, particularly the US Treasury market,” Dragosch added.

Sovereign hazard drives crypto appeal

Japan’s enslaved marketplace instability raises sovereign recognition hazard concerns, starring to much Bitcoin adoption among TradFi participants, Dragosch told Cointelegraph, adding:

“Bitcoin is an immutable asset. It’s escaped of counterparty risk. It’s a hedge against sovereign hazard and sovereign default.”

“Perceived default hazard continues rising, yields proceed rising? This is simply a unsmooth benchmark of wherefore Bitcoin could beryllium heading toward $200,000,” Dragosch said, adding that this remains conditional connected the continued Bitcoin accumulation from corporations and exchange-traded money (ETF) holders.

Meanwhile, the US spot Bitcoin ETFs are little than $1.3 cardinal distant from surpassing the monthly inflow grounds of $6.49 cardinal from November 2024, Cointelegraph reported connected May 23.