The Shift of Yields and Pressure on the USD - The Relation to Bitcoin

- The yield on the 10-year U.S. Treasury bond approaches 4.19%. Meanwhile, the yield on Japanese Government Bonds (JGB) starts to cool down after reaching historical highs. This tug-of-war reflects the conflict between extreme policy measures and the demand for foreign financing.

- The DXY index can no longer maintain its monopoly position. After dropping 9.2% in 2025, the index continues to lose another 3.1% in the first month of 2026. In contrast, currencies like the Euro and Japanese Yen are witnessing a strong recovery thanks to the Fed's caution and uncertainties from U.S. trade policy (tariffs).

- As the yield spread narrows, the profit from borrowing Yen to invest in USD assets disappears. This forces investors to unwind positions, pulling liquidity from global risk assets.

- The history of the years 2011, 2014, and 2021 shows that whenever this yield differential sharply decreases and breaches the 1.0% threshold, the price of Bitcoin $BTC often faces significant adjustment pressure.

=> Currently, short positions in Yen are still significantly lower than the peak levels of 2024. This implies that the amount of "dry wood" to create a liquidity fire (Yen Panic) like the summer of 2024 is limited.

=> Although $BTC is facing resistance from the narrowing Spread, the current market structure is more mature compared to previous cycles. The downward pressure is real, but the intensity may be alleviated by institutional capital flows and the shifting confidence as the USD weakens.