PANews May 23 report, Binance Research shows that the volatility in the bond market is impacting the cryptocurrency market through multiple channels. First, risk appetite transmission, rising bond yields lead to tighter liquidity in the crypto market, and a surge in the bond volatility index (MOVE) often signals a Bitcoin correction. Second, opportunity cost effect, high real interest rates make bonds relatively more attractive than Bitcoin, and Bitcoin saw significant declines when real interest rates soared in 2022. Third, macroeconomic feedback, concerns about economic recession can trigger capital withdrawal from the crypto market. Fourth, internal amplification mechanism, DeFi and stablecoins are more vulnerable under bond shocks, and liquidity tightening can easily trigger chain failures in leveraged crypto systems. The report also presents three scenario forecasts: in a 'soft landing', with falling inflation and interest rate cuts, it will benefit Bitcoin and DeFi recovery; if a systemic crisis occurs, a 'crypto winter' may emerge. Additionally, in 2025, attention should be paid to risks such as the U.S. debt ceiling reset and ongoing inflation.
