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#GENIUS Stablecoin Bill#
The Financial Illusion in the U.S. is Collapsing: Will a New Rally for Bitcoin Begin?
The nearing end of the financial illusion sustained in U.S. bond markets for years may increase investors' interest in alternative assets such as Bitcoin (BTC) in their search for safe havens.
For many years, U.S. financial markets operated under a type of financial illusion that convinced investors that government bonds were extremely safe and risk-free, contrary to the actual situation. Even though the U.S. government continuously exceeded its self-imposed borrowing limit, investors ensured the continuation of this artificial sense of security by purchasing government bonds at ultra-low interest rates.
However, recent movements in the bond market have begun to dispel this illusion. As highlighted by famous investor Paul Tudor Jones, the yield on U.S. 30-year treasury bonds recently surpassed the 5% level. This situation has become even more critical, especially with the yields on inflation-protected securities (TIPS) rising to 2.7%, the highest level in 22 years.
In traditional financial markets, when bond yields rise, the currency of the relevant country strengthens. However, despite the recent rise in U.S. bond yields, the euro/dollar exchange rate continues to rise. This situation indicates that investors now have serious concerns about the long-term fiscal sustainability of the U.S.
According to Robin Brooks from the Brookings Institution, the U.S. debt level reaching $36.22 trillion and expected to increase by another $22 trillion over the next decade has triggered alarm bells in the markets. Brooks states that investors' confidence in the U.S. long-term fiscal policy has seriously weakened.
Experts indicate that throughout history, governments have tried to alleviate heavy debt burdens through inflation, and the U.S. may prefer this path as well. Paul Tudor Jones explains this situation by stating, 'Every road eventually leads to inflation. Throughout history, governments have eroded their debts through inflation.'
If this situation occurs, the importance of assets such as gold and Bitcoin (BTC), which are viewed as long-term value storage tools, may increase. With the end of the illusion in financial markets, a significant rise in investors' interest in BTC is expected.