Bond Rout Fuels Fiat Fears as Bitcoin Gains Haven Appeal

Former British Prime Minister Liz Truss has warned that swelling government debt and policies that erode purchasing power threaten confidence in fiat currencies. Rising sovereign yields matter beyond bond markets: they increase borrowing costs, reduce the value of outstanding debt and tighten financial conditions across economies. The renewed stress has revived the “debasement trade,” in which investors seek assets whose supply cannot be expanded by governments or central banks.

UK government bond yields recently climbed above 5.2%, while rising yields in Britain and the United States unsettled global markets and sharpened scrutiny of fiscal sustainability. Against that backdrop, Bitcoin showed greater resilience than gold, strengthening its appeal among investors seeking protection from currency depreciation. Supporters point to the cryptocurrency’s fixed supply and independence from any single government, though its volatility means it remains a riskier hedge than traditional defensive assets.