Bitcoin has recently reached a new high of $110,545 on Binance, surpassing its previous January peak of $109,588, and is on track to potentially hit $111,000. This surge in Bitcoin’s price is occurring alongside a rise in gold prices, which increased by 0.6% to $3,312 per ounce, reflecting growing concerns over global fiscal stability.
The backdrop for this rally includes significant developments in Japan, where long-term bond yields have surged to record levels, with the 30-year and 40-year Japanese Government Bonds (JGBs) reaching 3.14% and 3.6%, respectively. This spike follows weak bond auctions, raising alarms about Japan’s substantial debt situation, which has been a long-standing concern but is now escalating.
In the United States, fiscal uncertainty is also mounting as the national debt approaches $36 trillion, with major policy deadlines looming in 2025. Analysts warn that without tax and spending reforms, the debt could exceed 120% of GDP in the next decade.
Rising interest rates have already increased borrowing costs, and political gridlock threatens to create a fiscal cliff. This environment of uncertainty is driving investors towards safe-haven assets like gold and Bitcoin, which has begun to mirror gold’s performance rather than traditional risk assets like US equities.
Market analysts have noted a trend where Bitcoin tends to follow gold’s lead during market shifts. MacroScope highlighted that the anticipated transition from gold to Bitcoin is occurring, with Bitcoin outperforming gold since March. This pattern has historically indicated the start of a phase where Bitcoin outperforms both gold and risk assets.
Additionally, there is increasing corporate and institutional demand for Bitcoin. Companies like MicroStrategy and MARA Holdings, along with new entrants, are accumulating Bitcoin as a strategic reserve asset. On a sovereign level, countries are also expected to accelerate their efforts to build national Bitcoin reserves, which could lead to long-term supply constraints.
Institutional interest remains strong, with US-listed spot Bitcoin ETFs attracting nearly $1 billion in net inflows over just two trading sessions. Bitpanda CEO Eric Demuth emphasized that Bitcoin is becoming a core component of the financial system, not just a niche asset.
Looking ahead, Arthur Hayes, co-founder of BitMEX, predicts that Bitcoin could surpass $110,000 and potentially reach values between $150,000 and $200,000, initiating a phase where altcoins may outperform Bitcoin. He also forecasts Bitcoin could hit $250,000 by the end of the year and even $1 million by 2028.
