How Bond Market Shifts Could Fuel a Bitcoin Rally

Unexpectedly, the rise in US interest rates could trigger a surge in Bitcoin's price. Insights into the underlying macroeconomic dynamics that could drive up the BTC price.

Written by Gaston Cuny

Translated on May 15, 2025 at 09:59 by Sarah

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Bitcoin Poised for a Strong Surge

While conventional wisdom would suggest that rising bond yields would harm risky assets like Bitcoin, the current situation could actually turn out to be extremely favorable for cryptocurrencies. An analysis of the economic factors at play reveals a macroeconomic context that could propel the price of BTC in the coming months.

According to many experts, the recent and persistent increase in US Treasury bond yields, despite a slowdown in inflation, can be directly attributed to expectations of a new era of massive fiscal expansion under the Trump administration. The revised tax plans involve nearly $4 trillion in tax cuts combined with $1.5 trillion in spending reductions, resulting in a net stimulus of $2.5 trillion.

The only policy that is bullish to growth that Trump is implementing thus far is that he is continuing Biden’s playbook of spending money at WW2 levels relative to GDP in nonrecessionary peacetime.

Undeniably bullish for stocks.

Bearish for bonds. pic.twitter.com/311FpyLOcY
— Spencer Hakimian (@SpencerHakimian) May 13, 2025

“Everyone wants to win the midterm elections. The deficit is no longer a problem. This is great news for Bitcoin, gold, and stocks. Catastrophic for bonds,” states Spencer Hakimian, founder of asset manager Tolou Capital Management.

This historically bullish deficit dynamic for tangible assets could provide a very favorable macroeconomic environment for a strong Bitcoin growth in the months ahead.

Increasingly Risky US Debt

Beyond this fiscal stimulus, many macroeconomics specialists believe that the high levels of bond yields – despite a slowdown in inflation – reflect a more fundamental concern: the sustainability of the US public debt.

This mechanism triggers a spiral of rising financing costs, forcing the government to issue more debt, further fueling the rise in yields. An potentially explosive cycle where Bitcoin, an asset considered independent of government monetary policies, could serve as a preferred escape route.

In this scenario, the US Federal Reserve could step in to contain the rise in long-term rates. This strategy, known as yield curve control, would involve massive bond purchases to prevent yields from exceeding a critical psychological threshold—potentially 5% on 10-year maturities.

Such intervention would indirectly boost market liquidity, a historically favorable factor for Bitcoin growth, as well as the performance of gold and the recovery of stock markets.

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Gaston Cuny

Gaston has been a writer for over 7 years and a passionate cryptocurrency enthusiast since 2020. He loves exploring the crypto ecosystem and is now dedicated to sharing his insights and discoveries through InvestX.

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This article is for informational purposes only and should not be considered as investment advice. Trading cryptocurrencies involves risks, and it is important not to invest more than you can afford to lose.

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