CoinShares analysis suggests bond market dynamics and U.S. fiscal concerns may drive Bitcoin demand more than Fed policy as crypto fund inflows cool.
Macro & Markets ·
CoinShares noted on October 8 that digital asset fund inflows have decelerated sharply in recent days, following approximately $11.1 billion in net inflows since mid-July. Concurrent with this slowdown, the 10-year U.S. Treasury yield moved above 5.3% and the 30-year yield reached 5.7%, both near multi-decade peaks. After September employment figures fell short of expectations, market pricing shifted dramatically: the probability assigned to an October rate hike dropped from 71% three weeks prior to 23%.
The firm contends that long-term bond market dynamics may supersede Federal Reserve decisions as a primary influence on Bitcoin demand. Should elevated long-term yields come to reflect fiscal sustainability concerns rather than economic strength, Bitcoin could gain traction as a hedge against government-backed currency. This reframing differs from the conventional view of crypto as a play on monetary policy cycles.
Fund flows have not yet visibly aligned with this narrative, leaving the trajectory of inflows as a critical metric for validating the thesis in the near term.