Bitcoin’s latest all-time excessive could also be linked to ongoing points within the Japanese bond market, probably signaling BTC’s rising recognition as a hedge towards instability within the conventional monetary (TradFi) system.
Bitcoin’s (BTC) worth rose to a brand new all-time excessive of $112,000 on Might 22, earlier than retracing to vary palms above $109,700 on the time of writing on Might 26, Cointelegraph information exhibits.
Whereas some attributed the rally to geopolitical developments, together with US President Donald Trump’s announcement of Russia–Ukraine ceasefire talks on Might 19, macroeconomic elements look like taking part in a bigger function, in response to market analysts.
Japan bonds hit yield document
Bitwise’s head of European analysis, André Dragosch, pointed to rising considerations round Japan’s sovereign credit score outlook, highlighting a spike within the nation’s long-term bond yields.
The 30-year yield on Japanese bonds reached a brand new all-time excessive of three.185% on Might 20, 2025, earlier than retreating to three.115% on Might 23, TradingView information exhibits.
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Authorities bonds are usually thought-about safe-haven belongings. However when yields rise sharply, it usually alerts investor considerations about fiscal sustainability and reimbursement threat. Japan’s debt-to-GDP ratio exceeds 250%, in comparison with Germany’s 62%, but each international locations had 30-year bond yields close to 3.1% on Might 21, noted The Kobeissi Letter.
“As a result of yields are rising, sustainability turns into extra of a difficulty, that means credit score threat will increase, that means yields enhance much more,” Dragosch mentioned. “And so you find yourself in this sort of fiscal debt doom loop.”
Dragosch mentioned the rising volatility in Japan’s bond market could possibly be prompting some institutional buyers to rethink Bitcoin’s function as a hedge towards sovereign default threat.
“That is now affecting different bond markets, particularly the US Treasury market,” Dragosch added.
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Sovereign threat drives crypto attraction
Japan’s bond market instability raises sovereign credit score threat considerations, resulting in extra Bitcoin adoption amongst TradFi members, Dragosch advised Cointelegraph, including:
“Bitcoin is an immutable asset. It’s freed from counterparty threat. It’s a hedge towards sovereign threat and sovereign default.”
“Perceived default threat continues rising, yields proceed rising? It is a tough benchmark of why Bitcoin could possibly be heading towards $200,000,” Dragosch mentioned, including that this stays conditional on continued Bitcoin accumulation by companies and exchange-traded fund (ETF) holders.
In the meantime, the US spot Bitcoin ETFs are lower than $1.3 billion away from surpassing the month-to-month influx document of $6.49 billion from November 2024, Cointelegraph reported on Might 23.
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