This Hasn't Happened in 25 years, your Bitcoin bags are not ready

What happened

The US 10 year yield just hit its highest level in 25 years. The article notes the late 1990s showed the Nasdaq kept rising even after the Fed raised rates three times, and says higher rates are a headwind for Bitcoin while rising government and corporate debt pushes investors toward a non sovereign asset.

Confirmed

Global impact / market context

Higher 10 year yields raise the return investors can get from safe government bonds, which can pull money away from riskier assets like Bitcoin. Yet the article argues record government and corporate borrowing may push investors toward Bitcoin as digital gold, so its price could face both downward and upward pressure at once.

Analyst inference

The article compares today with the late 1990s, when the Nasdaq kept climbing despite three Fed rate increases. That suggests rate hikes do not always stop risk assets from rising, so Bitcoin investors may face a tug of war between higher yields and demand for a non sovereign asset.

Analyst inference

What to watch

1. Watch whether the US 10 year yield keeps climbing above its 25 year high, because further increases would raise returns on safe bonds and could pull more money away from Bitcoin. Confirmed
2. Investors could track US government and corporate debt levels, since the article argues exploding borrowing pushes people toward a non sovereign asset like Bitcoin that behaves more like digital gold. Proposed
3. Compare Bitcoin's price reaction with the late 1990s Nasdaq, when stocks kept running after three Fed rate hikes, to judge whether higher yields are truly a headwind this time. Analyst inference

Affected assets

• LINK — Chainlink
• BTC — Bitcoin

Evidence

• youtube.com