Bitwise Links Bitcoin’s All-Time High to Japanese Market Turmoil

The recent all-time high of the leading cryptocurrency may have been driven by issues in the Japanese bond market, according to André Dragoș, head of research at Bitwise in Europe. This was reported by Cointelegraph. 

The analyst expressed concern about the prospects of Japan’s sovereign lending, highlighting the sharp rise in the country’s long-term bond yields.

On May 20, the 30-year yield on Japanese bonds reached a new all-time high of 3.185%, before falling to 3.115% by May 23.

“As yields rise, sustainability becomes an increasingly important issue, meaning credit risk increases and yields rise even further. Thus, you find yourself in a sort of fiscal debt vicious circle,” Dragoș noted. 

Meanwhile, The Kobeissi Letter highlighted anomalies in the Bank of Japan’s metrics. Currently, its refinancing rate stands at 0.5%, with the country’s debt-to-GDP ratio exceeding 250%. In contrast, Germany’s refinancing rate is at 2.25% (4.5 times higher), with a debt-to-GDP ratio of just 62% (one-fourth of Japan’s). Yet, the government bond yields of both countries are identical. 

Something does not add up here:

The Bank of Japan currently has a policy rate of 0.50% and Japan has a Debt-to-GDP ratio of 250%+.

Meanwhile, Germany has a policy rate of 2.25% (4.5x higher) and a Debt-to-GDP ratio of just 62% (1/4 of Japan’s).

However, 30Y Government Bonds in… https://t.co/jwiU7vkfUc pic.twitter.com/DloeycD6Ws

— The Kobeissi Letter (@KobeissiLetter) May 25, 2025

Dragoș believes that the increasing volatility in Japan’s bond market will prompt some institutional investors to reassess Bitcoin’s role as a hedge against default risk.

“Now [the Japanese crisis] is affecting other bond markets, especially the US Treasury market,” the expert added.

The Bitwise analyst suggests that the growing default concerns and rising yields on sovereign bonds could push the leading cryptocurrency towards $200,000.

“Bitcoin is an immutable asset. It is free from counterparty risk. It is a hedge against sovereign risk and sovereign default,” he concluded. 

In April, Matrixport recommended partially locking in profits on long positions in the leading cryptocurrency.

Earlier, Standard Chartered urged the purchase of digital gold and forecasted its price to rise to $120,000 in the second quarter.