Bitcoin and Gold Gain Appeal as U.S. Bond Market Shows Fiscal Weakness

The U.S. financial markets are exhibiting characteristics similar to "kayfabe," where the reality of fiscal instability is masked by investor confidence.

U.S. government has repeatedly hit its debt ceiling, yet investors continue lending at low yields.
Recent bond market dynamics reveal mounting concerns about long-term fiscal sustainability.
The U.S. 30-year Treasury yield surpassed 5%, raising fears of market destabilization.
Treasury inflation-protected securities (TIPS) yields reached over 2.7%, indicating higher compensation demands from investors.
The national debt stands at $36.22 trillion, projected to increase significantly in the next decade, leading to a debt-to-GDP ratio of 156% by 2055.
Breakdown in traditional correlations between forex and bond markets suggests declining trust in U.S. assets.
Options market shows bullish sentiment on EUR/USD, reflecting increasing dollar bearishness.
Historical patterns suggest that fiscal pressures may drive demand for hard assets like bitcoin and gold.

Concerns about fiscal policies may lead to potential financial repression, characterized by inflation exceeding savings returns. This scenario could benefit cryptocurrencies and commodities.

Increased volatility in U.S. Treasuries may cause temporary sell-offs across all asset classes, including bitcoin, despite a current downtrend in the MOVE index.