Japanese government bond market instability, Bitcoin rise stimulation…Default risk highlights hedge means

Bitcoin Emerging As A Hedge Against Instability Of US-Japan Economies (Source: WSJ)

Analysis has emerged that the volatility in the Japanese long-term government bond market is driving up the price of Bitcoin (BTC). In particular, it is interpreted that some global institutional investors are beginning to focus on Bitcoin as a 'digital hedge' due to doubts about the trustworthiness of Japanese government bonds.

According to Cointelegraph, Andrzej Dragosz, head of Bitwise's European research, reported that “On the 20th (local time), the yield on Japan’s 30-year government bonds recorded 3.185%, reaching an all-time high,” adding, “This surge in yield, along with anxiety within the bond market, is prompting investors to diversify their safe assets.”

Especially considering the talk of potential default on Japanese government bonds, he pointed out that some institutional investors are choosing Bitcoin as an alternative to traditional assets. “If the volatility and default risk of the bond market expand further, Bitcoin could quickly reach $200,000,” he added.

Currently, BTC is undergoing an adjustment after surpassing the $110,000 mark, but its role as an alternative asset is increasingly being emphasized amid macroeconomic uncertainties. Particularly, the trend of rapidly rising long-term yields in bond markets of developed countries including Japan and the US supports the background of increasing demand for BTC due to potential wavering trust in existing 'safe assets'.

Dragosz emphasized that “For BTC to reach $200,000 in the long term, the continued buying by ETFs and institutional holders is essential,” and that structural demand should be the focus rather than short-term selling pressure.