U.S fiscal crisis boosts Bitcoin’s appeal – Is it finally the new safe haven?

• Bitcoin tagged a brand new document excessive, regardless of a decline in U.S inventory and bond markets
• Consultants consider BTC could grow to be a risk-off, safe-haven asset amid U.S. fiscal debt

Bitcoin [BTC] surged to a document excessive of $111.8k whereas conventional markets – U.S. bond and inventory sectors – struggled with fiscal challenges. The truth is, on 21 Could, traders shunned the U.S 20-year Treasury bond, dragging bond costs and spiking yields to five.1%.

Supply: TradingView (BTC vs U.S. Greenback Index (DXY), Treasury bond yields)

The bond market rout crept into the inventory market, tanking the Nasdaq by 1.4%, whereas the S&P 500 Index slipped by 1.6%. The U.S greenback Index (DXY) additionally dropped to a 2-week low of 99.5. 

Quite the opposite, BTC mooned to a brand new excessive, a transfer Tushar Jain of crypto VC MultiCoin Capital considered as changing into a “risk-off’ asset.” He said, 

“We’re watching BTC remodel from a risk-on asset to a risk-off asset. Right now, we noticed additional proof that the federal government can’t minimize the price range deficit. The market reacted by promoting US treasuries, promoting USD, promoting equities, and shopping for BTC.”

Will U.S debt gas BTC?

The rising yield meant the U.S authorities would pay increased rates of interest to borrow cash for twenty years – An replace analysts linked to worrying fiscal spending and debt. 

On the time of writing, the U.S debt stood at $36.22 trillion. Nevertheless, President Donald Trump’s “massive lovely” tax invoice would result in an additional $3 trillion – $5 trillion in spending. 

This has raised considerations about inflation and debt sustainability, as seen by the weak demand for 20-year Treasury bonds.

The truth is, Moody’s downgraded the nation’s credit standing final week, reinforcing BTC’s place as a substitute safe-haven alongside gold. 

Supply: Newhedge 

Bitcoin additionally decoupled from gold in Q1 2025, and adopted U.S shares, that means it was a “risk-on” asset. Nevertheless, in Q2, it turned correlated with gold once more, and each rallied increased regardless of Trump’s tariff wars.

Now, with U.S fiscal woes worsening, Peter Schiff has urged his viewers to seize extra gold. Therefore, the query – Which protected haven has higher possibilities of outperformance within the brief to mid-term? 

Based on the BTC/gold ratio, an indicator that tracks Bitcoin’s worth relative to gold, the crypto asset has increased odds of outpacing gold. 

Supply: BTC/Gold ratio, TradingView 

Since April, BTC has eclipsed gold by 33% after the indicator bounced from the channel’s range-low.

If it extends to the range-high at 43, then BTC would document additional 26% positive factors towards gold.