- Bitcoin Reached a New All-Time High Above $111,800 as the US 20-Year Bond Auction Showed Weak Demand.
- The weak 20-year bond auction triggered a rise in Treasury bond yields for 10, 20, and 30-year bonds.
- As yields soared, the S&P 500 and BTC briefly fell, but the leading cryptocurrency quickly recovered its losses.
Bitcoin (BTC) reached a new all-time high above $111,800 on Thursday, rebounding from a brief dip to $106,000. The surge followed weak demand in the US Treasury’s 20-year bond auction, which pushed yields above 5%, potentially shifting investor interest towards alternative assets like Bitcoin.
Bitcoin Sets All-Time High Above 111,800 as US Bond Auction Disappoints Investors
Bitcoin was the star on Wednesday, climbing to a new all-time high of $109,800 and generating positive sentiment throughout the cryptocurrency market. Within hours, the leading asset surpassed $111,800 on Thursday, securing a second record in 24 hours, with a gain of over 4%.
The new push above the $111,800 level comes after a brief pullback to $106,000 earlier in the day, likely driven by short-term profit-taking by investors.
Bitcoin’s rise may have been supported by recent developments in the bond market, particularly the $16 billion offering in the US Treasury’s 20-year bond auction on Wednesday.
The 20-year bond offering saw weak demand, with buyers pushing for lower prices, leading yields above the 5.1% threshold, marking the second time a 20-year Treasury bond sale has triggered such an increase, according to The Kobeissi Letters.
The pressure also extended to 10-year and 30-year bond yields, which rose to 4.58% and 5.08%, respectively, further fueled by Moody’s recent downgrade of the US credit rating.
Japan’s 30-year yield also jumped sharply to a record high of 3.19% before stabilizing around 3.15%. The increase in yields reflects weak demand for government bonds, as yields tend to move inversely to prices. This has deepened concerns among global market participants about the decreasing attractiveness of government debt amid rising inflation and economic uncertainty.
In its latest report, KKR & Co highlighted that government bonds are no longer serving as reliable safe havens during market downturns, generating uncertainty among traditional investors. The firm clarified that the problem is not limited to the US but should be seen as a global issue.
As a result, investors may be reallocating from traditional safe havens to alternative safe-haven investments.
The rise in bond yields has put pressure on the broader traditional market, with the S&P 500 falling 1.61%, losing 95 points on Wednesday. While this has created cautious sentiment among equity investors, it appears to be adding momentum to Bitcoin’s recovery and strengthening its position as an alternative safe-haven asset during periods of economic uncertainty.
Bitcoin’s rise to new all-time highs suggests that traditional investors are moving capital into the asset. This is characterized by its realized capital crossing above $912.61 billion, reflecting a capital inflow of over $27 billion since the beginning of May. Investors have also driven net inflows of over $8.01 billion into spot Bitcoin ETFs in the US in the last five weeks, according to data from SoSoValue.
The leading cryptocurrency’s uptrend reveals a gradual decoupling from traditional equities, with BTC recording gains of over 7% in the last week, while the S&P 500 fell 0.43%.
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