Bitcoin's first test in the era of high interest rates: Why did gold rise 32% but fall 46%?

According to Woofun AI, global bond yields have climbed to their highest level since July 2008, while Bitcoin (BTC) had not even been invented yet. Today, for the first time, this digital asset is being traded in an environment of such high borrowing costs, yet its market performance has failed to benefit as expected; instead, it has become passive.

This misalignment between the macro background and core conflict indicates that Bitcoin is undergoing an unprecedented stress test since its inception.

Going back in history, the Bitcoin white paper was published in October 2008, and the first block was mined by Satoshi Nakamoto on January 3, 2009. Notably, the Genesis block recorded the “Times” headline of January 3, 2009: “The Chancellor of the Exchequer is considering bailing out the bank for the second time.” Bitcoin was originally intended to deal with government financial failures.

However, the current global fiscal situation is once again under pressure, and although the yield trend is global, it is not completely synchronized. The yield on UK 10-year treasury bonds was as high as 5.05%, ranking first in major markets; German yields rose to 3.21%, a record high since 2011; and Japan's yield also reached 2.88% after decades of near-zero interest rates. Patrick Coffey, strategist at Barclays (BCS.US), pointed out that the market is undergoing a broader repricing of the long-term period, and the underlying reason for this is fiscal reality, ongoing risk of inflation, and some political uncertainty. Looking at the US market, the yield on 10-year treasury bonds was 2.46% on January 2, 2009, and is currently 4.69%; the 30-year yield was 2.83% in the first week of Bitcoin's birth. On August 13, the US Treasury auctioned off $25 billion of 10-year treasury bonds, with a yield of 5.216%, the highest since 2001. This auction reflects weak market demand, and the subscription ratio is only 2.39 times, which is below the average level of 2.43 times;

At the same time, traders accepted 11.6% of the circulation volume, which is higher than the usual 10.6%.

The rise in real yields further embodies this pressure. On August 14, the US 10-year real yield reached 2.41%, compared to just 1.77% two years ago. For Bitcoin, which doesn't generate any cash flow, this is a difficult threshold to cross. Investors can now beat inflation by holding government bonds with almost zero risk. BTC is currently trading at $63,072 with a market capitalization of $1.27 trillion, but it's down 46% over the past year. By contrast, gold has risen 32% over the past year, and the price of gold was $4,376 at the time of writing. The increase in overseas yields has also had a profound impact. Japanese and European investors can now reap significant returns domestically, which directly narrows the global risk capital pool that cryptocurrencies can rely on.

Data compiled by Woofun AI shows that this shift in capital flow makes Bitcoin particularly vulnerable in the face of competition from traditional safe-haven assets in the absence of endogenous returns.

The drivers of rising yields determined the end result. If driven by economic growth, rising yields will suppress Bitcoin; if driven by doubts about the government's ability to pay its debts, it should benefit scarce assets. Gold has performed prominently under the latter logic. Therefore, the focus of observation should shift from technical charts to treasury bond auction requirements.

If demand for long-term treasury bonds increases, the pressure on Bitcoin prices is expected to ease. Prior to that, although Bitcoin was born in response to a financial crisis, it never needed to prove its worth at such a high level of yield.