From Wednesday morning, yields on the UK’s 30-year government bond rose to 5.5%-highest level since 1998-and played a wider increase in US sovereign yields and triggers fresh concerns about the stability of the financial market.
The rising global bond yield exerts significant downward pressure on risk assets. Since the US stock sale began last Thursday, Nasdaq has fallen 10%, while Bitcoin (BTC) has done a little better, down 8% in the same period.
At the same time, the British 30-year bond yield has risen by 8%, while the American 30-year-old has risen by 12%. Charlie Morris, founder of Bytetree, believes that investors will start seeking diversification in other assets, including Bitcoin.
“It seems that the United Kingdom has lived beyond his funds for too long. It has not balanced its budget since 2001, the gilded market has had enough,” Morris said. “Investors seeking diversification away from financial assets will not only buy gold but also bitcoin”.
The dramatic increase in yields has revived the disturbing memories of Britain’s pension crisis from 2022, when a sudden increase in borrowing costs triggered an almost collapse of the financial system and ultimately costs then prime minister Liz Truss her job.
This latest turmoil market for the bond market is driven by escalating uncertainty about the global trade, Stooket by President Donald Trump’s proposed customs plans. These charges could disrupt global supply chains and increase costs and add pressure to already jittery markets.
“Unfortunately, in politics you never get what you want by putting forward civil arguments from a high principle,” former British MP Steve Baker Coindesk said in an exclusive interview. “President Trump said he was using Brute Economic Force – and he is. It’s time to rediscover free trade at home and abroad, quickly before this chaos twists our futures.”
The recent yield overvoltage repeats the events in 2022, when a surprise mini-budget message on September 23 sent gilded yields soaring, crashed and exposed deep vulnerabilities in the UK pension system.
Many benefit -based pension schemes had adopted complex responsibility -driven investment strategies (LDI) strategies using leverage and derivatives to match long -term obligations. But when the yield was spiked, these funds suffered massively mark-to-market losses and faced margin calls, which quickly forced gilded sales to a thin market and created a destabilizing “Fean Sale” feedback-loop.
At that time, British pension funds contained about 28% of the gilded market. The subsequent chaos that occurred in a modest $ 1.5 trillion market was so severe that it required the Bank of England to step in with emergency -golden purchases to stop the downward spiral. ONE Chicago fat letter Analysis of the crisis later identified excessive gearing, asset polishing and the limited depth of the gilded market as key structural weaknesses – especially contrary to the much larger $ 9.9 trillion US Treasury Market.
