🚨 A not-so-good signal: The yield on 30-year U.S. Treasuries surged to 5.114%, reaching its highest level since July 2007.

At the same time, the 10-year yield rose to 4.54% and the 5-year to 4.31%.

This means the market no longer believes that the Fed will cut rates in 2026 and is starting to worry that the U.S. will continue to issue a lot of debt in the coming years, which might lead to higher inflation, a weaker dollar, and higher nominal interest rates, gradually diluting the debt.

This actually has a huge impact on global asset pricing:

Long-term bonds over 5% mean that all risk assets globally need to be re-evaluated.

Tech stocks, AI, Crypto, PE/VC, and high-valuation growth assets are essentially games of discounted future cash flows. The higher the risk-free rate, the more expensive the forward narrative becomes, making valuations harder to sustain.

Yesterday's decline is somewhat related to this.

But for bitcoin:native, there's a bit of nuance:

Because if long bond yields rise simply because the economy is too strong or the Fed is too hawkish, that would certainly suppress BTC in the short term;

But if long bond yields rise because the market starts to doubt the long-term sustainability of the U.S. fiscal situation, that could actually strengthen BTC's underlying narrative.

In short, it’s a very paradoxical and hard-to-judge situation!

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