Crypto: Us Yield Spread Hits 2021 Highs: A Warning For Bitcoin Price?

BTC price faces pressure as markets brace for a sustained rise in long-term yields driven by economic deficits, particularly in Japan.

The gap between the US’s longer-dated and shorter-dated bonds has widened to its highest level since 2021, signaling potential trouble for Bitcoin (BTC) in 2026.

A wider gap means long-term yields are rising, which can pressure Bitcoin.

Japan’s long-bond selloff is driving the move and pulling US yields higher.

Bitcoin’s market outlook looks increasingly bearish, if an assessment made by David Roberts, head of fixed income at Nedgroup Investments, on the global equity market is to be believed.

Roberts told Bloomberg that equities would suffer due to “a sustained push higher in yield.” He said the pressure is concentrated in longer-dated yields, particularly in Japan.

This week, Japan’s 30-year bond yield rose to a record 3.92%, widening its gap with the 2-year bond yields by 220–325 bps.

It can increase by another 75–100 bps, said Lauren van Biljon, senior portfolio manager at Allspring Global Investments, citing Prime Minister Sanae Takaichi’s election vows to increase spending.

The US 30-year yield closely tracks its Japanese counterpart, indicating that it would rise alongside in the coming weeks or months.

Higher yields typically reduce the opportunity cost of holding non-yielding assets like equities, which increases the probability of Bitcoin, a “high-beta” risk asset, dropping alongside.

Source: CoinTelegraph