Bitcoin’s Wild Ride: Yields Drop, Fed Panics, and Trump Tariffs

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The US 10-year Treasury yield has fallen below 4% for the first time since October. This is the kind of news that makes economists spill their coffee and Bitcoin enthusiasts spill their crypto wallets. 🚀

This signals a potential shift in Federal Reserve (Fed) policy, sparking renewed interest in Bitcoin (BTC) and other risk assets. Because, let’s face it, when the Fed sneezes, the market catches a cold, and Bitcoin? Well, Bitcoin just laughs and moonwalks to the bank.

Treasury Yields and Bitcoin: A Risk-On Rotation?

As highlighted by financial markets aggregator Barchart, this decline reflects growing economic uncertainty. Specifically, it suggests rising recession fears and increasing speculation that the Fed may pivot to rate cuts sooner than expected. In other words, the Fed might be about to hit the panic button. 🚨

A drop in Treasury yields reduces the attractiveness of traditional safe-haven assets like bonds, often encouraging investors to seek higher returns elsewhere. Because who wants to sit in a boring old bond when you can ride the Bitcoin rollercoaster? 🎢

Historically, Bitcoin and altcoins have benefitted from such shifts, as declining real yields increase liquidity and risk appetite. Crypto analyst Dan Gambardello emphasized this connection. He noted that lower yields are bullish for Bitcoin, aligning with expectations that a dovish Fed will drive liquidity into riskier assets.

“The irony is that when yields fall, there’s less reason to sit in “safe” bonds— And ultimately more reason to chase returns in risk assets like BTC and alts. This is why you see risk-on bulls get excited when 10-year yields begin falling,” he stated.

Additionally, BitMEX founder and former CEO Arthur Hayes pointed out that the 2-year Treasury yield sharply declined after the new tariffs were introduced. He said this reinforced the market’s expectation of imminent Fed rate cuts.

“We need Fed easing, the 2yr treasury yield dumped after Tariff announcement because the market is telling us the Fed will be cutting soon and possibly restarting QE to counter -ve economic impact,” Hayes shared on X (Twitter).

Tariffs and Market Volatility

Further, analysts have tied the yield drop to economic uncertainty triggered by Trump’s aggressive tariff strategy. As Gambardello noted, these tariffs have spurred a flight to safety, pushing bond prices higher and lowering yields.

This trend aligns with Trump’s broader economic approach of weakening the dollar and lowering interest rates, which historically benefit Bitcoin. During his first term, Trump frequently desired a weaker dollar and lower interest rates to boost exports and economic growth. He also pressured the Fed to cut rates multiple times. Because, you know, when Trump tweets, the market listens. 📱

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BeInCrypto data shows Bitcoin was trading for $82,993 as of this writing, up by a modest 1.42% in the last 24 hours.  Because, you know, even Bitcoin needs a breather sometimes. 🛋️

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2025-04-04 17:41