Bond Yields Crush Bitcoin as Scarcity Fails to Deliver

Global bond yields have reached their highest levels since July 2008, and Bitcoin is feeling the squeeze. The Bloomberg Global Long Bond Index yield has surged to around 4.2%, its highest level since 2008.

The long-term government borrowing costs are now back at levels last seen during the global financial crisis, making it a challenging time for investors who bet on a debt squeeze lifting the value of scarce assets like Bitcoin.

Bitcoin's whitepaper was published in October 2008, and its first block was stamped six months later with a newspaper line referencing the Chancellor's second bailout for banks. It was built as an answer to failing government finances, but this time around, it is not benefiting from the situation.

The move is global, with major markets like the US, UK, Germany, and Japan seeing significant increases in their 10-year bond yields. The UK's 10-year gilts pay 5.05%, while Germany sits at 3.21%. Japan pays 2.88% after decades of being pinned near zero.

The real yield, which is what a bond pays after inflation, has also increased significantly. The 10-year real yield reached 2.41% on August 14, making it more attractive for investors to earn returns with government debt rather than taking risks in the crypto market.