Bitcoin Holds at $78,000 as Global Bonds Sell Off

Bitcoin is trading around $78,000 on September 1 as a powerful wave of selling hits sovereign bonds worldwide. In the United States, the 10-year yield is approaching 4.8%. In Japan, it has reached 3% for the first time since 1996. Bitcoin, meanwhile, is barely moving.

Bitcoin Holds Despite Soaring Yields

The contrast is striking. While Bitcoin has just closed its best August since 2017, investors are selling government bonds heavily.

The 10-year US Treasury yield reached approximately 4.79% on Tuesday. The 30-year yield has returned to levels not seen since 2007.

In Japan, the 10-year yield has reached 3%, a 30-year high. Yields in the United Kingdom and Germany are also following the same trend.

Reuters describes a global bond sell-off driven by three concerns: persistent inflation, rising public debt and the possibility of further increases in policy rates.

Bitcoin is nevertheless remaining close to $78,000, after briefly moving toward $79,000 in the morning.

Debt Brings the Bitcoin Narrative Back Into Focus

Normally, rising yields do not help Bitcoin.

Bonds offering higher yields become more attractive than an asset without a coupon. This is the same mechanism that previously weighed on Bitcoin when US rates and oil sent Bitcoin lower.

This time, however, a second interpretation is emerging.

Investors are not selling bonds solely because they expect rates to remain high. They are also concerned about the amount of debt governments will have to finance. In the United States, the Treasury is already seeking to support market liquidity by increasing the size of certain bond buybacks to $4 billion from September.

This aligns with the scenario put forward by BlackRock. As Bref Crypto explained in its analysis of BlackRock’s recommended Bitcoin allocation, deficits and indebtedness may strengthen long-term interest in a scarce monetary asset.

The market often calls this logic the debasement trade.

$82,000 Remains Out of Reach

Bitcoin’s resilience does not yet mean that investors are abandoning bonds to buy BTC on a massive scale.

The price remains stuck in a broad range between $76,000 and $82,000. Sellers quickly emerge as it approaches $80,000.

And macroeconomic pressure has not disappeared. Brent is trading above $90 after renewed tensions with Iran. The Fed could still raise rates in September, while Barclays now expects two more rate hikes this year.

Bitcoin is therefore in a rather paradoxical position.

In the short term, rising yields, oil prices and rate expectations are a headwind. Over the longer term, the factors pushing investors to sell government debt—deficits, inflation and monetary concerns—feed directly into the narrative on which Bitcoin has thrived for years.

For now, BTC is not winning this battle. It is simply refusing to retreat. With the global bond market under pressure, that is already something to watch.