Bitcoin is increasingly being considered a go-to asset by global investors, viewed as a potential safe haven amidst growing fragility in the global macroeconomic landscape. The turbulence in the United States and the sharp rise in long-term bond yields globally have now become new catalysts propelling Bitcoin’s strength.

Yields on 30-year government bonds have surged worldwide, driven by worries about aggressive fiscal spending, ongoing trade tensions, and persistent inflation. These developments signal a higher risk premium being demanded by investors to hold long-term government debt.

According to Refinitiv data as of May 23, 2025, year-to-date 30-year bond yields have increased by 5.18% in the U.S., 7.13% in the U.K., 19.9% in Germany, and a massive 33.26% in Japan.

These surging yields are having a pronounced impact on borrowing costs, equity markets, and international capital flows.

Key drivers behind the rising bond yields include:

• Expansive Fiscal Policies: Governments in countries like the U.S., U.K., and Japan are implementing large-scale spending that increases budget deficits, raising investor concerns over long-term debt sustainability.

• Trade Tensions: Global trade conflicts—especially those involving the U.S.—add economic uncertainty, prompting investors to demand higher returns.

• Persistent Inflation: Ongoing inflation has raised fears that central banks will keep interest rates elevated for longer, pushing bond yields higher.

CNBC International reports that the global bond sell-off has been fueled by Moody's downgrade of the U.S. credit rating and fiscal concerns arising from President Donald Trump’s proposed tax plans.

Rong Ren Goh, a Fixed Income Portfolio Manager at Eastspring Investments, said that events like credit downgrades or deficit-boosting fiscal bills often bring fiscal risks to the forefront of investors' minds, forcing a reassessment of long-term exposure.

Trump, unable to sway GOP dissenters to back his broad tax plan—which could add between US$3 trillion and US$5 trillion to national debt—is seen as a major factor behind the global bond market disruption.

“The markets clearly don’t find Trump’s ‘big, beautiful tax bill’ all that attractive,” said Vishnu Varathan, Managing Director at Mizuho Securities. “U.S. Treasuries took a major hit in a brutal sell-off.”

The mass sell-off in government bonds came on the heels of a major outflow from U.S. assets in April, largely due to waning investor confidence, according to analysts.

Bitcoin Becomes a Serious Contender

Bitcoin is now displaying behavior that defies traditional risk asset patterns. Rather than weakening amid worsening macro conditions, Bitcoin is rising.

Amid global uncertainty, rising bond yields in the U.S. and Japan, slowing economic growth, and weakened consumer confidence in the U.S., Bitcoin reached a new record high on May 22, 2025.

This paradox underscores a shift in how investors perceive risk and safe havens. Once considered the safest asset, U.S. Treasuries are now being reconsidered amid debt concerns and soaring yields—pushing investors toward alternatives like Bitcoin.

As the U.S. continues spiraling into deeper debt and Japan potentially faces a similar fate, the global economy remains fragile. Ironically, this seems to play in Bitcoin’s favor.

Traditionally, higher yields weigh on risky assets. Yet today, both equities and Bitcoin are rallying. This divergence suggests investors may be moving away from conventional strategies. As trust in traditional financial systems erodes, off-system assets like stocks and Bitcoin are beginning to shine—even if technically labeled as risky.

Moreover, compared to U.S. equities, more institutional players are leaning into Bitcoin. As noted by The Kobeissi Letter, 38% of institutional investors were underweight in U.S. equities as of early May— the lowest level since May 2023, according to data from Bank of America.