Analysis: Bitcoin is negatively correlated with Japan's 10-year government bonds. If the Bank of Japan stabilizes government bonds, it may drive a rebound in Bitcoin

Delphi Digital stated that Bitcoin prices are stagnant while gold continues to rise. The reason may lie in Japanese government bonds. Typically, rising yields increase the opportunity cost of holding non-yielding assets, thereby putting pressure on gold. However, when both gold and yields rise in sync, the market is actually pricing in policy pressures and balance sheet vulnerabilities, rather than economic growth. The yield on Japan's 10-year government bonds is currently about 3.65 standard deviations above the long-term average. The Bank of Japan structurally holds long-term bonds and is deeply exposed to Japanese government bonds in terms of both assets and collateral.

Gold is absorbing this pressure, while Bitcoin has a negative correlation with Japan's 10-year government bonds, and over the longer term, Bitcoin has been relatively struggling as Japanese yields rise. If the Bank of Japan intervenes to stabilize the government bond market, the risk premium in gold may ease, providing Bitcoin with room for a rebound.