Analyst: The Deep Logic Behind Bitcoin's Rally in Response to Rising U.S. Bond Yields

On May 14th, as reported by Coindesk, the continuous increase in U.S. government bond yields, particularly Treasury yields, has traditionally been regarded as a headwind for risk assets like Bitcoin (BTC). However, analysts point out that the recent resilience of U.S. bond yields actually contains a deep-seated logic favorable to Bitcoin. Spencer Hakimian, the Founder of Tolou Capital Management, noted that the current strength in yields reflects the market's pricing in expectations of fiscal expansion during the Trump administration. "With soft CPI data, U.S. bonds are falling, indicating that fiscal expansion is unstoppable. Everyone is betting heavily before the midterm elections, and the debt deficit is being temporarily set aside - this is good news for Bitcoin, gold, and stocks, but a nightmare for bonds." According to Hakimian's estimation, Trump's tax cut plan will immediately add $2.5 trillion to the fiscal deficit. A draft disclosed by Bloomberg shows that the plan includes $4 trillion in tax cuts and $1.5 trillion in spending cuts, resulting in a net expansion of $2.5 trillion. Arif Husain, the Chief Investment Officer for Fixed Income at T. Rowe Price, believes that fiscal expansion is about to become the dominant market narrative. "Fiscal expansion may stimulate growth, but more importantly, it will intensify pressure on the Treasury market. I am now more convinced that the 10-year U.S. Treasury yield will reach 6% in the next 12-18 months." Anonymous research firm EndGame Macro's analysis stated that the sustained high U.S. bond yields reflect the "fiscal dominance" phenomenon, which is fundamentally a repricing of U.S. sovereign risk. When inflation is trending downward but bond yields continue to rise, the issue is no longer the inflation cycle but the sustainability of U.S. debt issuance itself. Rising yields will increase debt servicing costs, forcing the government to issue more bonds (expanding supply), thereby further driving up rates and ultimately potentially triggering a sovereign debt crisis. In this scenario, Bitcoin, considered a countercultural asset, may highlight its value as part of a strategic allocation.