The crypto rally bond vigilantes fueled is picking up steam, pushing Bitcoin and altcoins to new highs. A group of investors, dubbed “bond vigilantes” by economist Ed Yardeni, played a crucial role in triggering this market momentum.
Bond Vigilantes Pressure Government Policies
Bond vigilantes are investors who sell bonds when they disagree with government policies. Their selling pressure drives yields higher, making it more expensive for governments to borrow.
This time, their actions impacted both the bond and stock markets. Major U.S. indices like the Dow Jones and Nasdaq 100 jumped over 10% from recent lows. Similarly, European markets like Germany’s DAX and France’s CAC 40 posted strong gains.
Earlier this month, President Trump announced new tariffs, including a baseline 10% tariff on imports and higher tariffs on Chinese goods. However, after bond vigilantes reacted strongly, Trump appeared to reconsider.
Ed Yardeni commented, “The Bond Vigilantes have struck again,” highlighting their undefeated record in influencing U.S. financial policy.
Soaring Bond Yields Add Pressure
Bond yields surged, with the 10-year Treasury reaching 4.585% and the 30-year testing 5% for the first time since January. Higher yields meant an increase in U.S. debt servicing costs, threatening Trump’s ambitious plans for large, unfunded tax cuts.
Trump acknowledged the bond market’s power, stating, “The bond market is very tricky. I was watching it.”
The rising yields likely also influenced Trump’s decision to abandon efforts to fire Federal Reserve Chair Jerome Powell — a move that could have destabilized U.S. bonds and the dollar.
Crypto Markets Ride the Wave
Meanwhile, the crypto market saw explosive gains. Bitcoin climbed back toward $95,000, touching its highest level in over a month. Meme coins also surged, with Brett (BRETT) on the Base blockchain soaring 95% in seven days.
Other altcoins, including Virtual Protocol, Official Trump, Sui, and Dogwifhat, all posted gains of over 50% in the past week. As a result, the total crypto market cap jumped to $3 trillion.
Outlook: Crypto Rally Could Continue
With Trump hinting at potential deals with China and backing off aggressive policies, market sentiment is improving. Lower tariff risks and a greater chance of Federal Reserve rate cuts could further boost the crypto market in the coming weeks.
Investors are watching closely, as bond vigilantes continue to play a quiet but powerful role behind the scenes.
