The Bond Market Crash is Here! What Happens to Bitcoin Now? | Truth Block

Hurley (0:00)

The bond market crash is accelerating. More than half a trillion dollars got wiped off gold and silver in a few hours this morning, and Bitcoin got dragged under 83k right along with them. The Treasury is struggling to sell its own debt. Oil is surging again as the Iran talks fall apart, and Scott Besson is live on TV warning the Fed about the mistake that came right before 2008 So are we staring down a 2008-level crash? Because the biggest buyers in the world sure aren't acting like it. Wall Street just poured 2.4 billion dollars into Bitcoin in a single week, and Strategy and Strive bought almost 2,800 more coins on top of it. Today, I'll show you what's really behind this crash. Why Bitcoin is holding up better than gold, and why one of Wall Street's top economists thinks the next bank run could be started by AI. This is TruthBlock. I'm Hurley.

Let's mine truth.

Quick thing before we get started. Most people watching this aren't subscribed. And with the setup Bitcoin's in right now, you're going to want to catch what comes next. So hit subscribe so you don't miss a beat. Bitcoin is sitting just shy of 84K after tagging 82,600 this morning. Gold is down about 3.4% and silver about 5%, which puts gold roughly 25% below its record high from January. The reason for all of it again is the bond market. In this week, the crisis we've been tracking got a lot worse. On Wednesday, the treasury went to sell $70 billion of five-year notes and got the weakest demand since 2018

And the bond market's own fear gauge had the biggest weekly jump since Liberation Day. The Treasury has been buying back its own bonds to try and hold yields down, and this month it couldn't even fill its own order.

Yields went up anyway. Then the war poured fuel on it. On Sunday, Treasury Secretary Scott Bessent went on Fox and said Iran was on its knees and that the Iranians were promising to reopen the Strait of Hormuz within seven days. This morning, Trump rejected Iran's plan. The talk stalled and oil spiked 4%.

So now, the market sees about a 2 and 3 chance the Fed hikes again next month. And mortgage rates just jumped to around 7.5%, the highest in more than two years. James Lavish wrote about what this does to everything in his informationist newsletter this weekend. When a Treasury pays you 5% to sit there and do nothing, investors start rethinking anything that doesn't pay interest. And this week, the money chose the 5%.

So what we're watching is the bond market pulling every hard asset down with it. But it didn't hit them all the same. Gold and silver got hit much harder than Bitcoin. And there's a very specific reason why. Luke Groman has been one of the loudest gold bulls in the world for years.

He explained exactly why gold is the first thing that gets sold in a war like this, and what flips it.

Luke Groman (2:34)

I think what we've seen since this war started is instructive. Initially, it'll be sold as a reserve. Gold has acted like a reserve asset. Oil went up, Treasuries were sold, gold was sold for oil. Because oil is higher on the marginal, higher on Measles hierarchy of needs. And contrary to a lot of folks view, gold didn't go back to 2,700 or 3,100 or 3,500 or 3,600, right? It traded for a second like 3,900 and it's holding in really well.

Which is to say, the longer this crisis goes on, the more obvious it becomes that paper is worthless in real terms.

If cash can't get you copper, the second derivative of that is you cannot store wealth in bonds. And so initially in this crisis, oil up, gold down for reserves, treasuries down for reserves, got it. But there's still, what did I say? $22 trillion in net assets over here, $9.5 trillion in treasuries, more in other Western sovereign debt when you add it on top of that. All of it's worthless in real terms, the longer this goes on.

And only the people in that business are thinking about that now. The traders aren't there yet, but they'll get there. The longer this goes on, they will get there. And it will happen quickly. It will happen non-linearly.

And when that happens, you're going to see gold rise because basically the bond market is going to try to fit itself into the gold market. And by the way, I think probably one of your early indicators will be Bitcoin. So it's been very interesting to me when Irish Bitcoin last year at 95, 96,000, 23, 24 ounces of gold went to 60,000. I thought it would go lower. I think it's going lower. The longer this goes on, it stops, it shifts from being bad for gold, bad for Bitcoin to being good for gold, good for Bitcoin. Because the longer it goes on, the more obvious it's going to come to everybody that sovereign paper is worthless. Private credit paper is worthless.