Treasury Secretary Reveals Trump's Target: Could Be Positive for Bitcoin! - Coin Bulletin

The Donald Trump administration plans to lower the 10-year bond yield by controlling inflation and reducing fiscal spending, which could be positive for Bitcoin (BTC).

US Treasury Secretary Scott Bessent has announced that the Trump administration aims to reduce borrowing costs by lowering 10-year Treasury yields. Bessent said in an interview with Fox Business that Trump did not pressure the Federal Reserve to lower interest rates, but rather sought to bring down yields by controlling inflation and the budget deficit.

The 10-year bond yield is considered as an indicator that directly affects long-term borrowing instruments such as mortgages and business loans. Decreasing yields facilitate access to credit, encourage investments, and increase risk appetite in financial markets. This situation is generally seen as a positive signal for risk assets such as Bitcoin.

As part of Trump's inflation control strategy, it is reported that he aimed to increase energy supply. According to Bessent, the decrease in energy prices will alleviate inflationary pressures and facilitate the Fed's interest rate cuts. Since September 2024, the Fed has lowered interest rates by 100 basis points, bringing them to the range of 4.25-4.5 percent.

However, Trump's plan to cut back on fiscal spending to close the budget deficit is causing some concerns in the markets. The previous Biden administration's high fiscal spending had supported the financial markets. Cutting back on spending could create short-term risks, especially for volatile assets such as cryptocurrencies.

The 10-year bond yield has fallen by 38 basis points to 4.42 percent in recent times due to falling energy prices and low inflation expectations in the markets.

According to ING analysts, it is unlikely that the 10-year yield will fall below 4%. It is emphasized that stronger macroeconomic reasons are needed for a permanent decrease in yields. In addition, the effectiveness of programs such as the Government Efficiency Department established by the Trump administration in reducing spending remains uncertain.

While the decline in 10-year bond yields creates a positive environment for Bitcoin in the short term, it seems difficult to reach a definite conclusion on how this trend will continue in the long term without clarifying the impact of spending cuts on the markets.