Bitcoin Gains Favor as U.S. Bond Yields Rise and Fiscal Uncertainty Drives Volatility

Bitcoin’s price action is increasingly sensitive to traditional finance events, as seen after a weak U.S. 20-year Treasury bond auction triggered a price drop, then a partial recovery. As long-term U.S. Treasury yields climbed and Moody’s downgraded U.S. sovereign debt, concerns over America’s fiscal stability grew, weighing on risk assets including both equities and cryptocurrencies. However, analysts suggest that Bitcoin could increasingly outperform traditional investments such as stocks and bonds during periods of macroeconomic uncertainty, as it is seen as an alternative store of value. Renewed investor concerns were fueled by the Congressional Budget Office projecting a $2.4 trillion increase in the U.S. deficit, driving demand for safe-haven assets. While gold saw mixed performance, Bitcoin rebounded 1.7% to around $108,000, with some major altcoins like Solana also showing gains. During U.S.-China trade talks in London, easing geopolitical tensions supported a cautious improvement in crypto market sentiment. Experts like James Butterfill from CoinShares assert that a weakening U.S. dollar and uncertainty in fiscal policy could further benefit Bitcoin and gold. Crypto traders are urged to vigilantly monitor U.S. bond auctions, shifting fiscal policy, and major global trade developments, as these factors could heighten crypto market volatility but also create opportunities for assets like Bitcoin that are increasingly viewed as hedges against macro risk.