The Bond Market Is a Mess, Trump’s Tariffs Are The Tipping Point – Can Bitcoin Survive?

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The bond market, that sacred pillar of global financial order, is now buckling under the weight of its own chaos. On X, the financial world is having a collective panic attack, as market participants cry out about what many are calling a “broken” system. Jim Bianco of Bianco Research, a so-called oracle in the financial world, took to X with a cryptic warning: “Something has broken tonight in the bond market. We are seeing a disorderly liquidation. If I had to GUESS, the basis trade is in full unwind.” Well, that’s comforting, isn’t it?

Bianco isn’t the only one waving red flags. He’s pointing out that the 30-year US Treasury yield has jumped a massive 56 basis points in just three days. He calls this “historic.” To put it in perspective, the last time yields spiked this much in such a short time was back in January 1982 when the yield was a whopping 14%. You know, back when people wore mullets and thought the world was on the brink of… well, you get it.

Cathie Wood from ARK Invest seems to be reading from the same disaster script. She’s speculating that “this swap spread is suggesting serious liquidity issues in the US banking system,” and she’s calling for a “Mar-a-Lago Accord on free trade.” Sounds like the financial world is in need of a superhero, but apparently, it’s not one who’s in any rush to show up.

Meanwhile, Daniel Yan from Kryptanium Capital is looking at the situation and shaking his head. First, Trump’s tariffs hit the equity market, then the bond market implodes, and now the credit market looks on the brink. The next step? “An emergency Fed intervention,” or as he puts it, “a real crisis.” How reassuring. Really, nothing says “we’re in good hands” like a late-night emergency meeting at the Fed.

Charlie Gasparino, a seasoned financial journalist, added his own flair to the disaster narrative: “Now stuff is getting interesting and scarily so; wicked spike in long-dated bond yields portends an unwind of a massive trade, possibly a hedge fund losing money and imploding, or a major foreign creditor dumping treasuries in retaliation to Trump’s trade war.” Yeah, nothing says stability like a potential hedge fund implosion or foreign creditors causing a tantrum.

Peter Schiff, who’s never met a financial catastrophe he didn’t like, echoed the sentiment: “The Treasury market is crashing.” He’s right. The yield on the 10-year just hit 4.5%, and the 30-year hit 5%. Is this the beginning of a 1987-style stock market crash? Stay tuned!

Macro analyst Alex Krueger, not to be outdone, described the scene as Trump and Bessent “shooting themselves in the foot… with a shotgun.” Subtle, Alex. Subtle.

What’s Happening?

What’s behind all this turmoil, you ask? It’s the basis trade, a risky, leveraged strategy employed by hedge funds to exploit price discrepancies between Treasury futures and the bonds themselves. This trade, which thrived during the golden age of ultra-low interest rates, is now, according to Bianco, in full meltdown mode. Who could have predicted it?

The rapid unwinding of leveraged positions has sent bond prices plummeting, with yields soaring, much to the dismay of investors. And here’s where it gets even juicier: as yields climb to 5.00%, the entire financial ecosystem starts to feel the heat—especially Bitcoin and crypto markets. Bitcoin, that safe haven, might want to reconsider its marketing strategy.

And just to keep things spicy, President Trump’s global tariff drama has made sure the whole world is on edge. His tariffs are sparking inflation fears, adding fuel to the fire. Meanwhile, crude oil prices have dropped a staggering 21%, falling to $57 per barrel, the lowest since April 2021. So now, we’re looking at a perfect storm: a crash in bonds and oil, leaving the financial world gasping for air. Someone call a lifeguard!

Implications For Bitcoin And Crypto

“Is it foreigners dumping? The basis trade blowing up? Inflation fears? No one knows for sure. But look past the ‘why,’ and it all leads to the same fork in the road: Fed intervention—or net interest expense blasts through $1 trillion.” So, the only thing we know for sure is that it’s going to get really interesting, or terrifying, depending on your outlook.

According to Bitwise CIO Matt Hougan, Bitcoin could see a nice boost if the Trump administration pushes for a weaker dollar. Meanwhile, Stack Hodler isn’t holding back: “This isn’t 2008. It’s worse. The Global Sovereign Debt bubble is bursting right in front of us.” Well, if that doesn’t get you excited for the apocalypse, I don’t know what will.

As of now, Bitcoin is sitting at $76,952. But who knows what the next hour will bring?

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2025-04-10 00:06