Bond Market Crash Sparks Opportunity for Bitcoin

Peter Schiff has highlighted the significant decline in the value of long-term US Treasury bonds. The iShares 20+ Year Treasury Bond ETF (TLT) has fallen to a fresh 52-week low, down more than half its value from its peak in March 2020. At $81.89 on Friday, TLT has lost 54% of its value since hitting $179.70 in March 2020.

The real loss is worse when adjusted for inflation, with prices having risen 29% since March 2020, according to the Bureau of Labor Statistics. This means that long bond holders are down closer to 65% in purchasing power.

Schiff's numbers have checked out, and his claim that TLT has lost half its value is conservative. The Treasury sold $25 billion of 30-year debt on Thursday at a yield of 5.216%, the highest since 2001. This has put pressure on Bitcoin (BTC), which traded near $62,968 on Friday, down 3.2% in 24 hours.

The link to crypto is opportunity cost, as a government bond paying above 5% competes directly with an asset that pays nothing. Schiff argued in July that the next major crash would start in the bond market rather than in crypto.