What to know:

• Bitcoin’s recent price action correlates more with Japan’s 30-year bond yields than with traditional risk assets like the Nasdaq, indicating a new behavioral anchor as per macro analysts.
• Rising Japanese Government Bond (JGB) yields seem to guide U.S. Treasury yields, pointing towards Japan’s influence on U.S. monetary policies and cross-asset market behavior.

Insights from Weston Nakamura

Weston Nakamura, founder of Across The Spread, an analyst known for macro perspectives, emphasizes the critical relationship between Bitcoin and Japanese long-term bonds. He indicates that Bitcoin (BTC) is reflecting movements in the yields of 30-year JGBs rather than traditional parallels with U.S. equities like the Nasdaq.

He highlights that as Bitcoin’s price diverges from conventional risk assets, it aligns with climbing JGB yields, both of which reached new highs recently. Nakamura recalls significant events in 2024 such as the onset of U.S.-listed spot BTC ETFs and Trump’s re-election which resulted in short-lived spikes in BTC value, only to revert back to trends influenced by JGB yields.

Nakamura asserts that this correlation isn’t merely a secondary effect of U.S. Treasury yields, but rather a direct result of unique dynamics within Japan’s market. He references a statement from U.S. Treasury official Scott Bessent, noting that U.S. Treasury yields aren’t primarily swayed by domestic political issues but by global factors specifically tied to Japan.

This suggests a notion that U.S. policy is potentially adjusting around the 10-year Treasury yield, which is in turn influenced by the Japanese bond market; thus, Japan may be indirectly steering U.S. macroeconomic policy.

Nakamura advocates for investors across asset classes to closely observe Japan’s bond market as its previously neglected market exerts significant sway on global cross-asset behavior.