Bitcoin’s new highs may have been driven by Japan bond market crisis
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Bitcoin Hits $112K: Could Japan’s Bond Crisis Be the Real Catalyst?
While headlines have focused on geopolitical events — like Trump’s recent call for Russia-Ukraine ceasefire talks — as the spark behind Bitcoin’s surge to an all-time high of $112,000 on May 22, a deeper force may be at play: Japan’s bond market turmoil.
According to André Dragosch, Head of Research Europe at Bitwise, rising concerns over Japan’s fiscal sustainability and sovereign credit risk are pushing investors toward Bitcoin as a macro hedge.
Yields on Japan’s 30-year government bonds reached a historic 3.185% on May 20. With a debt-to-GDP ratio exceeding 250%, Japan is entering what Dragosch describes as a “fiscal doom loop” — where rising yields increase credit risk, which in turn drives yields even higher.
In this context, Bitcoin’s unique profile — immutable, decentralized, free of counterparty risk — is gaining renewed appeal as an alternative to sovereign debt.
“Bitcoin is an immutable asset. It’s free of counterparty risk. It’s a hedge against sovereign risk and sovereign default.”
— André Dragosch, Bitwise
This shift in perception is also reflected in ETF flows: U.S. spot Bitcoin ETFs are now less than $1.3 billion away from breaking their monthly inflow record, set in November 2024. With institutional interest climbing, some analysts are already eyeing the $200,000 mark as a potential milestone — if the macro uncertainty continues to intensify.
Ultimately, Bitcoin’s rise isn’t just about short-term speculation anymore. It’s about long-term positioning. In a world where traditional financial systems are being tested, Bitcoin is becoming a serious alternative in times of sovereign doubt.
