- Concern about the rapidly rising U.S. government debt is partly behind recent surges in gold prices and bitcoin, even as the Treasury market so far remains relatively sanguine about the country's fiscal path, market observers say.
“Concerns about the U.S. debt cycle, devaluation of money - and fiat money in particular - does drive the story and the narrative,” said Brad Bechtel, global head of FX at Jefferies. The U.S. central bank has intermittently purchased Treasuries in an effort to stimulate growth, which can pull yields lower and increase the supply of dollars.
That has traditionally been bullish for bitcoin, said Bechtel. Bitcoin reached a record $73,803 in March. In yield curve control a central bank buys bonds in order to maintain a target interest rate, which can reduce government borrowing costs.