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Falling U.S. Treasury Yields Stoke Hopes for Bitcoin Rally

The recent dip in U.S. Treasury bill yields has sparked chatter among crypto heads. Since the Federal Reserve slashed interest rates by half a point on September 18, yields on short-term Treasuries—especially those maturing in three months—have been sliding. While this is shaking things up in traditional finance, something else has been brewing. Gold, the go-to hedge for many, has jumped nearly 5% since the cut. But, crypto diehards are now wondering if Bitcoin, often called “digital gold,” could be gearing up for a similar move.

CryptoQuant analysts are nodding their heads at the trend. They noted that, back in 2008, as 13-week Treasury yields dropped, gold shot up from $590 to a towering $1900 by 2011. In 2024, the same game seems to be playing out, with gold climbing from $2000 to nearly $2700. And now, eyes are on Bitcoin, hoping for a comparable run.

Safe-Haven Assets: Gold and Bitcoin Under the Macro Lens

Analyst J.A. Maartunn from CryptoQuant isn’t just looking at yields in isolation. He told The Block that falling yields on Treasuries signal more than just rate cuts—they usually come with a macroeconomic package. He explained that, during the 2007-2009 recession, the money supply (M2) went up a lot, which sent people chasing safe-haven assets like gold. The same playbook unfolded during the pandemic, with a massive surge in money supply spiking demand for assets like Bitcoin, which no central bank can print out of thin air.

So, while Bitcoin hasn’t gone parabolic just yet, Maartunn and others believe the stars could be aligning.

Bitwise Sees Bullish Signs in Expanding Global Money Supply

André Dragosch, Bitwise’s European research guru, also weighed in. Speaking to The Block, he pointed out that the global money supply is now at an all-time high. Historically, when money supply expands, Bitcoin bull runs tend to follow. He said, “We expect that these rate-cutting expectations will continue to be a major positive driver for Bitcoin and cryptoassets.”

Bitcoin, though still moving cautiously, has posted a slight 1.4% uptick and was hovering around $61,114 as of 10:49 a.m. ET. Traders, however, are expecting a bigger catch-up as the macro waves ripple through.