Macroeconomics and Crypto Markets
The sovereign debt crisis returned as the market's top talking point as both U.S. and Japanese government bond auctions turned out historically weak. Rising long-term rates in both countries reflected growing concerns about sovereign debt sustainability, pushing equity markets lower. Meanwhile, Bitcoin broke new records and strengthened its position as an alternative to the fiat system – in investors' eyes, "the hardest asset."
In the United States, President Trump's earlier conciliatory tone in trade negotiations shifted to aggressive. Trump announced 50% tariffs on EU products starting in early June and threatened 25% tariffs on iPhones unless Apple moves production to the United States. However, markets increasingly appear to view these statements as negotiation tactics.
At the same time, weak demand for 20, 30, and 40-year government bonds in both the U.S. and Japan pushed rates to new highs. In Japan, 40-year bond yields rose to 3.635% – an all-time high. The concern isn't just inflation, but above all rapidly ballooning budget deficits. Trump's new tax initiative would increase U.S. national debt by up to $5 trillion, and in Japan, new stimulus measures are being discussed ahead of July elections – even as the inflation target has already been exceeded.
Trust in the fiat system – this entire complex structure – ultimately rests on faith. And it's precisely this "magic dust" that's now being tested. Central banks own an ever-larger share of government debt: in Japan about 50%, in Europe 30%, and in the U.S. 20%. This indicates that debt is being purchased by printing money – leading to gradual currency debasement.
Investors who previously relied on government bonds as a safe haven are gradually shifting their assets toward real assets: stocks, gold – and above all, Bitcoin. The current macroeconomic state is a turning point where many institutional players are beginning to see Bitcoin's significance as an alternative collateral and store of value. We're now witnessing a transformation that may in the future prove to be a historic awakening of investors.