Long-Term Indicator Rises: Bitcoin and Stocks Face New Pressure from Government Bonds

The market is experiencing a significant adjustment amid fundamental changes in the global borrowing cost calculation basis. The US long-term government bond yields have reached their highest level in four months, creating ripple effects across all asset classes, from Bitcoin to Wall Street equities.

The figure drawing investor attention is the US 10-year Treasury yield which has surged to 4.27% according to TradingView data. Meanwhile, Bitcoin declined more than 1.5% to $88,000 today, while Nasdaq futures—an index filled with tech companies—corrected 1.6%, reflecting worsening market sentiment towards risk assets.

Why Is This Global Benchmark So Important for the Long Term?

US government bond yields are not just ordinary financial figures. They are a fundamental benchmark underpinning the entire structure of interest rates in the global economy. The rate paid by the government for long-term funds acts as a “risk-free” reference from which banks and financial institutions calculate all other loan products.

Economic giants like China and Japan hold trillions of dollars in US Treasury bonds, representing large-scale investment commitments. When government bond yields rise, the effects spread everywhere. Financial institutions increase mortgage rates, auto loans, and corporate credit because they must offer a premium above the Treasury benchmark to compensate for additional risks.

This phenomenon is known as “financial tightening”—a condition where borrowing costs increase across the economy simultaneously, reducing consumer purchasing power, hindering corporate investment, and creating barriers to capital allocation in financial markets.

High-Risk Assets Are Affected Long-Term

In such a financial tightening environment, investors tend to avoid high-risk assets with high potential returns. Bitcoin and other cryptocurrencies are the first category to lose appeal among institutional investors. Meanwhile, equities also feel similar pressure, albeit on a different scale.

This shift in the global borrowing benchmark creates a dilemma for Bitcoin holders. Crypto assets, sometimes presented as long-term stores of value, attract investor attention seeking inflation hedges. However, when real interest rates increase—that is, real yields after inflation become more attractive—gold and traditional instruments offer a seemingly safer alternative.

Data shows gold has jumped above $5,500 per ounce with very high trading volume, reflecting institutional investor interest in tangible assets as long-term stores of value. The gold sentiment index indicates extreme optimism, forming a sharp contrast with the fear and greed zone still trapped in the crypto market.

What Is the Real Trigger Behind the Rise in Yield Benchmarks?

The root cause of the Treasury surge is linked to global geopolitical dynamics. Recently, President Donald Trump announced a 10% tariff threat against eight European countries starting February 1, escalating to 25% on June 1 unless an agreement on Greenland’s acquisition is reached.

This statement sparked market speculation that Europe might retaliate by selling part of their $12.6 trillion US asset portfolio, including Treasury bonds and stocks. Such large-scale sale threats cause concerns about a massive bond offering, pushing yields higher as bond prices fall.

However, analysts state that this scenario is easier to talk about than to execute. Most US assets held by Europe are in private hands, not government funds, so coordinating a massive sell-off would be difficult to achieve.

Similar Trends in Global Bond Markets

The phenomenon of rising long-term benchmark yields is not limited to the US. In Japan, government bond yields are also continuing to rise, triggered by the election campaign of Prime Minister Sanae Takaichi, which proposes tax cuts for food and other essentials. This larger fiscal plan adds to market perceptions of the need for larger amounts of government bonds.

This pattern repeats in other advanced economies—yields surge, government bond issuance increases, and investments in risk assets like Bitcoin and stocks face ongoing pressure.

Implications for Digital Asset Investors and Capital Markets

The current situation illustrates fundamental challenges for Bitcoin as a long-term store of value narrative. When real interest rate benchmarks become attractive through high-yield Treasury instruments, institutional investors tend to prefer traditional instruments over volatile digital tokens.

This gap will continue to pressure Bitcoin and other digital assets as financial tightening persists. Serious investors seeking diversification will view physical gold, silver, and bonds as more reliable hedges in the long term compared to cryptocurrencies still searching for stable value benchmarks in the mainstream market.