Home›Crypto›Market Structure›U.S. primary deficit and rising yields fuel haven dema…

U.S. primary deficit and rising yields fuel haven demand for bitcoin

The U.S. primary budget deficit is 3.6% of GDP, the largest among major advanced economies, and bitcoin is up 23% this month alongside a 10% gold gain.

Reported · Written up by our desk · Market Structure

CoinDesk notes that the U.S. primary budget deficit is 3.59% of GDP, the largest among major advanced economies, based on Bloomberg data shared by The Kobeissi Letter. The metric excludes interest payments on existing debt, focusing on the gap between government spending and revenue.

The newsletter argues that concerns over high debt can shift market sentiment away from higher risk assets and toward low-debt safe havens, which can translate into markets demanding higher compensation to hold Treasuries. In that scenario, it says yields are more likely to keep rising even if the Treasury actively manages debt issuance.

CoinDesk links the debt-and-yield dynamic to crypto and gold demand, saying the usual story that higher yields hurt risk assets does not fully apply when debt fears are the driver. It points to recent performance, with bitcoin gaining 23% this month and gold rising 10%.

The outlet also flags that upcoming data, including Friday’s nonfarm payrolls, could move expectations for a September Fed interest rate increase, potentially adding volatility to bitcoin and related markets.

Latest closeGold $4,504.10 ▼2.3%|Bitcoin $77,877.93 ▲0.1%

More like this

Sources