15 Januari 2026
There is a saying that goes, “If you want to understand America, watch a professional wrestling match.” While this statement may seem simplistic, it contains a kernel of truth. The American financial markets are increasingly displaying characteristics that we see in the world of professional wrestling, including the concept of “kayfabe.”
Kayfabe refers to the illusion that the disabled action in the ring is real, with the audience accepting this make-believe world for the entertainment. This same phenomenon has played out in the financial markets over the past decade. Despite the fact that the U.S. government has repeatedly hit its self-imposed debt ceiling—a clear indication of fiscal crisis—investors continue to lend money to the government at extremely low interest rates. They maintain the appearance that the government is a safe and reliable borrower.
Recently, however, bond market players have thrown in the towel. Legendary trader Paul Tudor Jones warned of the weakening of this illusion, which makes the case for investments in stable assets such as Bitcoin (BTC) and gold enhanced.
A hot topic this week is that the yield on 30-year treasuries has exceeded 5%. Some experts say that this development could destabilize financial markets. And yes, we have seen this phenomenon before, for example last October, according to recent data.
But the real story is the rise in yields on Treasury Inflation Protected Securities (TIPS), where the principal is adjusted for inflation. The yield on the 30-year TIPS has recently risen above 2,7%. This means that investors require at least 2,7% above inflation to lend money to the government for a period of XNUMX years.
Imagine a consumer who is increasingly unconfident about the future of the economy. The consumer price index (CPI) is growing but slowing toward the Fed’s 2% target, while market gauges are stabilizing there. Inflationary pressures from the U.S.-China trade war appear to be easing, but the real problem lies in how the government is handling fiscal policy.
As of May 19, the U.S. national debt stood at $36,22 trillion, with forecasts that this figure will increase by $22 trillion over the next decade. This will result in a debt-to-GDP ratio of a staggering 156% by 2055. Doom seems increasingly imminent, and that’s making investors nervous.
Robin Brooks of the Brookings Institution points out that the five-year real rate serves as a proxy for investor doubts about the sustainability of fiscal policy. “The 5y5y forward real rate is now at 2,5%, the highest level since 2010,” he says. The urgency to get the fiscal situation in order is clear.
Another sign that the market is starting to wake up is the break in the traditional correlation between the forex and bond markets. Normally, a rise in bond yields causes the value of the home currency to rise. But this time it seems different. The EUR/USD has been rising since early April, while the tension between German and US government bond yields has eased. Investors seem to be losing confidence in US assets.
Historically, when governments have fiscal problems, they have tended to create inflation by printing money. This course will undoubtedly be followed again, increasing demand for tangible assets like gold and Bitcoin. As Paul Tudor Jones has pointed out, “all roads lead to inflation,” and we should prepare for an era of increasing financial repression and persistent high inflation.
The situation is complex, but let's not forget: “They can call it whatever they want – but it all comes down to the same thing: liquidity increases and Bitcoin benefits.”
The bullish outlook on Bitcoin doesn’t mean there aren’t any obstacles to overcome. The U.S. bond market plays a crucial role in global finance. Increased volatility could lead to a global search for liquidity, with investors even selling Bitcoin. But for now, the MOVE index, which measures the expected volatility of U.S. Treasuries, remains in a downtrend.
Imagine how the market will develop. Where are your opportunities in this centaur of inflation and false security? Now is a time for reflection and perhaps even action!
What are the implications of rising bond yields?
Rising bond yields could lead to increased volatility in financial markets, prompting investors to sell assets including Bitcoin.
Why is there so much uncertainty about US debt?
The national debt is growing at an alarming rate, raising concerns about the fiscal sustainability of the government and thus the stability of financial markets.
How can I benefit from the current market situation?
Invest in store-of-value assets like Bitcoin and gold, which are likely to increase in value as inflation rises and fiscal problems persist.
Bitcoin (BTC)
Ethereum (ETH)
XRP (XRP)
