According to BlockBeats, on May 14, Coindesk reported that the continuous rise in U.S. government bond yields (especially Treasury yields) is traditionally seen as a headwind for risk assets like Bitcoin (BTC). However, analysts point out that the recent resilience of Treasury yields actually hides deep logic favorable to Bitcoin.
Founder of Tolou Capital Management Spencer Hakimian pointed out that the current rise in yields reflects the market pricing in expectations of fiscal expansion during Trump's term. 'The soft CPI and the drop in Japanese bonds indicate that fiscal expansion is unstoppable. All parties are betting heavily before the midterm elections, temporarily putting the debt deficit aside — this is a boon for Bitcoin, gold, and stocks, but a nightmare for bonds.' According to Hakimian's calculations, Trump's tax cut plan will immediately add $2.5 trillion to the fiscal deficit. A draft disclosed by Bloomberg shows that the plan includes $4 trillion in tax cuts and $1.5 trillion in spending cuts, resulting in a net expansion scale of $2.5 trillion.
Arif Husain, Chief Investment Officer of Fixed Income at T. Rowe Price, believes that fiscal expansion is about to become the dominant narrative in the market. 'Fiscal expansion may stimulate growth, but more crucially, it will intensify pressure on the treasury market. I am now more convinced that the 10-year U.S. Treasury yield will reach 6% within the next 12-18 months.'
Anonymous observation agency EndGame Macro analyzes that the persistently high U.S. Treasury yields reflect a 'fiscal dominance' phenomenon, essentially re-pricing the sovereign risk of the U.S. When inflation declines but bond yields continue to rise, the issue is no longer the inflation cycle, but the sustainability of U.S. debt issuance itself. Rising yields will increase the cost of debt servicing, forcing the government to issue more bonds (expanding supply), which will further push up interest rates and could ultimately trigger a sovereign debt crisis. In this scenario, Bitcoin, regarded as a counter-system asset, may highlight its allocation value.
