Rising government bond yields are signaling a structural shift that could trigger a Bitcoin supercycle, as investors flee assets subject to inflation, according to BitMEX senior research analyst Shang Wu.
The yield on the 30-year US Treasury broke past 5.14% on Tuesday, while the Bank of Japan's 10-year government bond yield touched 2.8%.
Wu warns these yields are unsustainable long-term, forcing governments to choose between debasing their currencies and a sovereign debt collapse.
Central banks are cornered, Wu says. For Bitcoin, the upcoming volatility will be chaotic short-term, but it serves as the ultimate structural tailwind for a long-term supercycle.
The analysis comes as US national debt crosses $39 trillion, with growing geopolitical tensions and the ongoing war in Iran threatening to boost government spending and inflation.
Conventional rate hikes won't solve the problem-they will simply bankrupt the government. With $39 trillion in debt, higher rates would increase government debt servicing costs, consuming the entire federal tax base.
Wu and macroeconomist Lyn Alden suggest central banks may disguise quantitative easing through methods like yield curve control and unannounced buybacks of US government debt.