Bitcoin’s current all-time excessive could also be linked to ongoing points within the Japanese bond market in a improvement that will sign BTC’s rising recognition as a hedge in opposition to instability within the conventional monetary (TradFi) system.
Bitcoin’s (BTC) value rose to a brand new all-time excessive of $112,000 on Might 22, earlier than retracing to alter arms above $109,700 on the time of writing on Might 26, Cointelegraph information reveals.
Whereas some attributed the rally to geopolitical developments, together with U.S. President Donald Trump’s announcement of Russia–Ukraine ceasefire talks on Might 19, macroeconomic components seem like taking part in a bigger position, based on market analysts.
Japan bonds hit yield report
Bitwise’s head of European analysis, André Dragosch, pointed to rising issues 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 reveals.
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Authorities bonds are usually thought of safe-haven property. However when yields rise sharply, it typically alerts investor issues about fiscal sustainability and compensation threat. Japan’s debt-to-GDP ratio exceeds 250%, in comparison with Germany’s 62%, but each nations had 30-year bond yields close to 3.1% on Might 21, famous The Kobeissi Letter.
“As a result of yields are growing, sustainability turns into extra of a difficulty, which means credit score threat will increase, which 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 traders to rethink Bitcoin’s position as a hedge in opposition to 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 enchantment
Japan’s bond market instability raises sovereign credit score threat issues, resulting in extra Bitcoin adoption amongst TradFi individuals, Dragosch instructed Cointelegraph, including:
“Bitcoin is an immutable asset. It’s freed from counterparty threat. It’s a hedge in opposition to 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 the continued Bitcoin accumulation from 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 report of $6.49 billion from November 2024, Cointelegraph reported on Might 23.
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