Bitcoin historically thrives during periods of inflation and rising debt yields but struggles when central banks tighten monetary policy. Recent spikes in government bond yields across the G7, attributed to inflation and debt concerns, could signal a favorable environment for Bitcoin, much like its previous surges alongside gold during similar yield increases in 2013 and early 2021. However, contrasting movements occurred in 2018, when yields rose due to aggressive Fed tightening, leading to a dramatic Bitcoin decline. Currently, Bitcoin's price has risen by 4.2% in recent days, reflecting increased holder retention and a burgeoning hedge against government debt, which surged over $1 trillion in just two months. With notable bond auction failures and declining demand for government bonds, investors are shifting towards hard assets like gold and potentially Bitcoin. Analysts suggest that Bitcoin may soon confirm its status as a hedge in this tumultuous macroeconomic climate, with predictions of significant price movements by 2026. This article serves to outline these trends and does not provide investment advice.

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