BitMEX analyst Shang Wu said rising global bond yields could trigger a long-term Bitcoin supercycle.
Bitcoin News
Rising yields on government bonds in the US and Japan signal a structural breakdown in the traditional debt market that will likely drive a long-term Bitcoin price surge, according to Shang Wu, a senior research analyst at crypto exchange BitMEX.
Wu published the analysis on May 21, noting that the yield on the 30-year US Treasury broke past 5.14% this week, while the Bank of Japan's 10-year government bond yield reached 2.8%. He described these levels as unsustainable over the long term and argued they will force governments to choose between currency debasement and sovereign debt failure.
The US national debt currently stands at $39 trillion. Wu said maintaining interest rates at their current levels would cause the government's annual interest expense to consume the entire federal tax base. Raising rates further to contain inflation would compound that problem, making the standard central bank tool ineffective under current debt conditions.
"Central banks are backed into a corner," Wu wrote. "They must choose between a sovereign debt collapse and debasing their currencies." He added that geopolitical tensions and energy price pressures are adding further strain on government finances, increasing the likelihood of deficit spending.
The analyst argued that central banks will respond by injecting liquidity through unconventional means, such as yield curve control and unannounced buybacks of government debt, rather than admitting to outright money printing. Macroeconomist Lyn Alden has made a similar argument in prior analysis.
Wu acknowledged that $BTC will face short-term volatility as these pressures unfold. Over a longer horizon, he said the environment amounts to a structural tailwind for the asset, which has a fixed supply and cannot be inflated by any government or central bank. Wu described the eventual outcome as a Bitcoin "supercycle," a sustained multi-year price advance driven by capital rotating out of debasing assets.
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