Treasury’s 10-year yield fell to 4% while DXY is already softening-time to buy Bitcoin price collapse?

On April 3, the result of the US government’s long -term debt fell to their lowest levels in six months as investors responded to growing concerns in the global trade war and the weakening of the US dollar. The yield of the 10-year Treasury Note was easily touched by 4.0%, down from 4.4% a week before, signing strong demand from consumers.

At first glance, an increased risk of economic retrieval may seem negative for bitcoin (Btc). However, the lower return from fixed income investments encourages allocations to alternative properties, including cryptocurrencies. Over time, traders are likely to reduce exposure to bonds, especially when inflation increases. As a result, the path to a Bitcoin all-time high in 2025 remains possible.

Tariffs create ‘supply shock’ in the US and affect inflation and fixed income

One can argue that the recent -only announced US import tariffs Negatively affects corporate profitability, forcing some companies to dealeverage and, in turn, reduces market liquidity. Ultimately, any proposal that increases risk prevention tend to have a short-term negative impact on Bitcoin, specifically given a strong relationship with the S&P 500 index.

Axel Merk, Chief Investment Officer and Portfolio Manager in the Mark Investments, said tariffs have created a “supply shock,” which means the reduced availability of goods and services due to rising prices causes an imbalance of relatives. This effect is strengthened if interest rates decrease, potentially putting a method for inflationary pressure.

Although a person does not view Bitcoin as a fence against inflation, the appeal of fixed income investment decreases dramatically in such a scenario. Moreover, if only 5% of the $ 140 trillion bonds in the world are looking for a higher return elsewhere, it can be translated to $ 7 trillion in potential streams into stocks, goods, real estate, gold, and bitcoin.

Poor US dollar in the middle of gold that all times favored alternative properties

Gold moved forward In a $ 21 trillion market capitalization because it has made it all the time, and it still has the potential for significant price reversal. Higher prices allow previously unprofitable mining operations to continue and encourage further investment in exploration, acquisition, and refinement. As production expands, supply growth naturally acts as a limiting factor in the long -term bull run of gold.

Regardless of the trends in US interest rates, the US dollar has weakened against a basket of foreign currencies, as measured by the DXY index. On April 3, the index dropped to 102, its lowest level in six months. A denial of confidence in the US dollar, even in relatives -relative terms, could encourage other countries to explore alternative value stores, including Bitcoin.

This move does not occur overnight, but the trade war can lead to a gradual transition from the US dollar, especially in countries that feel forcing its dominant role. While there is no expectation that returning to the gold or bitcoin standard to become a major element of the national reserve, any movement far from the dollar strengthens the long-term reversed potential of Bitcoin and strengthens its position as an alternative property.

Related: Trump’s Liberation Day tariffs have created excitement in markets, retreating concerns

To put things in perspective, Japan, China, Hong Kong, and Singapore collectively hold $ 2.63 trillion in US wealth. If these regions choose to retaliate, bond yields can reverse their trend, increasing the cost of new debt release for the US government and more Decreases the dollar. In this scenario, investors are likely to avoid increasing exposure to stocks, eventually favorable to difficult alternatives such as bitcoin.

Bitcoin’s market time is almost impossible, but the fact that the $ 82,000 level of support held despite worsening economic uncertainty is an encouraging sign of its stability.

This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.