Bitunix Analyst Says U.S. Fiscal Deficit Is Lifting Term Premium as Crypto Faces Liquidity Pressure

On Aug. 19, the U.S. 10-year Treasury yield briefly climbed to 4.75%, its highest level since January 2025, while the 20-year yield rose to about 5.28%. Long-dated Treasuries continued to face selling pressure. A Bitunix analyst said the move is no longer just about expectations for the Federal Reserve’s short-term policy rate. In the analyst’s view, markets are now reassessing U.S. fiscal deficits, inflation risk and the term premium attached to long-term debt. The U.S. national debt is nearing $40 trillion, and the fiscal deficit keeps widening. That means the government has to rely on a larger bond supply to absorb market funds. When investors demand higher yields to buy long Treasuries, the impact does not stop at government borrowing costs. Corporate financing, mortgages and the cost of capital for high-valuation assets all move higher as well. That shift is also weighing on tech valuations. AI and semiconductor companies are still showing strong profit growth, but rising risk-free rates increase the discount rate on future cash flows, which forces investors to recalculate valuation premiums for growth stocks. The Fed’s July meeting minutes are drawing attention for that reason. The minutes showed that three officials supported a rate hike at the time, and markets are now looking for more signals on inflation, how restrictive policy is, and where the committee is divided. If the minutes lean hawkish, expectations for a longer period of high rates could strengthen. If the committee is still waiting for more economic data, pressure on short-term rates may ease, but that would not immediately solve the fiscal pricing issue in long-term Treasuries. Global funding costs are shifting in Japan and Switzerland as well. Mizuho said the Bank of Japan could raise rates as soon as September and may even speed up the pace of hikes later. A more normal rate environment in Japan would reduce the funding advantage of the yen as a global borrowing currency. By contrast, Switzerland is still holding rates at zero, which could make the Swiss franc a new funding currency for some carry trades. The point is not just a currency move; global carry capital is choosing the cheapest source of funding again. For crypto, the backdrop is more direct. Bitcoin still has medium- to long-term demand from ETFs and institutional flows, but in the short term it remains highly sensitive to dollar liquidity, real yields and risk appetite. As long-end Treasury yields keep rising, the opportunity cost of capital increases worldwide. High-valuation stocks and crypto assets then face stiffer competition for funding. The key question now is not a single rate outlook, but whether the Fed policy rate and long-term Treasury yields continue to diverge.