Bitcoin Primed for Rally as Bond Yields Defy Logic—Here’s Why

Wall Street’s favorite narrative just got flipped on its head. While rising bond yields typically spell trouble for risk assets, Bitcoin’s gearing up for a surge—and the irony isn’t lost on crypto veterans.

The institutional pivot: As traditional fixed income craters under inflation’s weight, capital’s fleeing to harder assets. Bitcoin’s 21M supply cap suddenly looks far more appealing than Treasury promises of ’2% someday.’

Technical tailwinds: BTC’s weekly chart shows a bullish divergence even as 10-year yields hit decade highs. Market mechanics suggest hedge funds are quietly rotating out of ’safe’ bonds... into digital scarcity.

The cynical kicker: Maybe yields are rising because everyone finally realizes the Fed’s balance sheet is just an Excel fantasy. Bitcoin doesn’t do spreadsheet monetary policy—it cuts out the middlemen entirely.

Per Pseudonymous observer EndGame Macro, the persistent elevated Treasury yields represent fiscal dominance, an idea first discussed by economist Russel Napier a couple of years ago and Maelstrom’s CIO and co-founder, Arthur Hayes, last year, and repricing of U.S. sovereign risk.

"When the bond market demands higher yields even as inflation falls, it’s not about the inflation cycle it’s about the sustainability of U.S. debt issuance itself," EndGame Macro said on X.

The observer explained that higher yields create a self-reinforcing spiral of higher debt servicing costs, which call for more debt issuance (more bond supply) and even higher rates. All this ends up raising the risk of a sovereign debt crisis.

BTC, widely seen as an anti-establishment asset and an alternative investment vehicle, could gain more value in this scenario.

Moreover, as yields rise, the Fed and the U.S. government could implement yield curve control, or active buying of bonds to cap the 10-year yield from rising beyond a certain level, let’s assume 5%.

The Fed, therefore, is committed to buy more bonds every time the yield threatens to rise beyond 5%, which inadvertently boosts liquidity in the financial system, galvanizing demand for assets like bitcoin, Gold and stocks.