Bitcoin Eyes Bullish Momentum Amid Global Bond Market Divergence

As global markets brace for disruption from U.S. President Donald Trump’s escalating trade war, an emerging divergence in government bond yields may fuel another Bitcoin bull run. U.S. Treasury notes are offering yields above 4%, while Swiss government bonds with maturities up to five years are trading at negative yields—highlighting a growing divide in global economic outlooks.

According to Investing.com, the Swiss two-year yield sits at -17.8 basis points, underscoring investor fears of deflation in economies with trade surpluses, such as Switzerland, Germany, and China. In contrast, the U.S., with its persistent trade deficits, faces mounting inflationary pressure and rising debt servicing costs.

This divergence reflects how the global bond market is pricing in the effects of protectionist policies. Countries like the U.S. may see increased inflation, while Europe and China could confront disinflation or outright deflation. Central banks in those regions are likely to respond with further monetary easing—both the Swiss National Bank and European Central Bank have already slashed rates recently.

Such policies historically shift capital toward alternative assets. Bitcoin, in particular, has benefited from similar macro conditions in the past. During the 2020-2021 rally, BTC surged from $5,000 to over $60,000 amid record levels of negative-yielding debt.

Analysts believe history may repeat. “This yield divergence reflects deflationary pressure and a rotation into monetary sovereignty safe havens,” wrote macro analyst EndGame Macro on X, referencing rising demand for assets like Bitcoin.

With growing concerns over sovereign debt stress and bond yield volatility, Bitcoin could re-emerge as a preferred hedge for investors seeking stability outside traditional markets. The current bond landscape may once again set the stage for crypto's next major rally.