Global bond yields surge as debt fears test bitcoin’s hedge narrative
Global bond yields are surging to multi-year highs, raising concerns about the cost of debt for AI infrastructure projects. While some investors look to gold and bitcoin as hedges, bitcoin has struggled to gain traction as a safe-haven asset during this period of market volatility.
Why it matters
Rising interest rates increase refinancing risks for capital-intensive AI infrastructure, potentially impacting the broader tech sector and speculative asset classes.
Bond prices and yields move inversely, meaning yields rise when investors sell bonds. The 30-year U.S. Treasury yield has reached 5.33%, its highest level since 2007, while the equivalent U.K. gilt yield is approaching 6%. French borrowing costs are at their highest since 2008, and Japan’s long-term yields continue to set records.
TLT, the exchange-traded fund (ETF) tracking long-duration U.S. Treasuries, fell to an all-time low of $81.35 on Monday.
Oil remains a concern, as WTI crude is trading above $84 a barrel, up 25% from its July low, and has remained above $70 since the war began in February. However, five and ten-year inflation expectations have been relatively stable over the past week, at 2.25% and 2.28%, respectively. That suggests inflation is not the market’s primary concern.
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