Bitcoin punches new all-time high above $111,800 following brief shock from weak 20-year bond auction

• Bitcoin set a new all-time high above $111,800 as the US 20-year bond auction met weak demand.
• The weak 20-year bond auction sparked a rise in Treasury yields across the 10-, 20- and 30-year notes.
• As yields soared, the S&P 500 and BTC declined briefly, but the top crypto quickly recovered its losses.

Bitcoin (BTC) hit a new all-time high above $111,800 on Thursday, rebounding from a brief dip to $106,000. The surge followed weak demand in the US Treasury’s 20-year bond auction, which pushed yields above 5%, potentially shifting investor interest toward alternative assets like Bitcoin.

Bitcoin sets all-time high above $111,800 as US bond auction disappoints investors

Bitcoin took center stage on Wednesday, surging to a new all-time high of $109,800 and sparking positive sentiment across the crypto market. Within hours, the top asset climbed above $111,800 on Thursday, securing a second record high within 24 hours, with a gain of over 4%.

The fresh push above the $111,800 level comes on the heels of a brief pullback to $106,000 earlier in the day, likely driven by short-term profit-taking from investors. 

Bitcoin’s rise may have been supported by recent developments in the bond market, particularly the $16 billion offering of the US Treasury’s 20-year bond auction on Wednesday.

The 20-year bond offering saw weak demand, with buyers pushing for lower prices, which drove yields above the 5.1% threshold, marking the second time a 20-year Treasury sale has triggered such a spike, according to The Kobeissi Letters.

The pressure also extended to the 10- and 30-year Treasury yields, which climbed to 4.58% and 5.08%, respectively, further fueled by Moody’s recent downgrade of the US credit rating.

Japan’s 30-year yield also surged sharply to an all-time high of 3.19% before settling around 3.15%. The uptick in yields reflects weak demand for government bonds, as yields tend to move inversely to prices. This has deepened concerns among global market participants about the diminishing appeal of government debt amid rising inflation and economic uncertainty.

In its latest report, KKR & Co highlighted that government bonds are no longer serving as reliable safe havens during market declines, stirring uncertainty among traditional investors. The firm clarified that the issue is not limited to the US but should be seen as a global problem.

As a result, investors may be repositioning from traditional safe havens to alternative safe haven investments.

The rising bond yields have pressured the broader traditional market, with the S&P 500 dropping 1.61%, losing 95 points on Wednesday. While this has created a cautious sentiment among equity investors, it seems to be adding momentum to Bitcoin’s rally and strengthening its position as an alternative safe-haven asset during periods of economic uncertainty.

Bitcoin’s rise to new all-time highs suggests that traditional investors are moving capital into the asset. This is characterized by its realized cap crossing above $912.61 billion, reflecting a capital inflow of more than $27 billion since the beginning of May. Investors have also pushed net inflows of over $8.01 billion into US spot Bitcoin ETFs in the past five weeks, per SoSoValue data.

The top crypto’s uptrend reveals a gradual decoupling from traditional stocks, with BTC posting gains of over 7% in the past week, while the S&P 500 declined by 0.43%.