Why a Bond Market Crisis Could Push Bitcoin Back Above $100K: Fundstrat
As yields hit their highest levels since 2002, Bitcoin gets interesting again
By Zack Guzman
October 2, 2026
Investors are increasingly paying attention to trouble in the bond market — and that could mean great things for Bitcoin.
That is the emerging thesis from Fundstrat Head of Digital Asset Strategy Sean Farrell, who argues that rising Treasury yields, mounting government borrowing costs, and the policy response they could eventually force may be creating a surprisingly bullish backdrop for Bitcoin.
“I do think we’re at a point where we have enough signals in place that indicate that Bitcoin has made durable cycle lows,” Farrell told Coinage in a new interview. “And I think that we have a macro story now that should shift liquidity trends in crypto’s favor.”
That macro story begins with a bond market sending increasingly uncomfortable signals. The 10-year Treasury yield touched a high of about 5.34% on Thursday, marking its highest level since 2002.
Farrell pointed to the combination of elevated long-term Treasury yields, a U.S. debt-to-GDP ratio above 120%, and fiscal deficits running around 6% to 7% of GDP. Higher interest rates only make that equation more difficult, since refinancing the government’s enormous debt load at higher rates pushes interest expenses higher.
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For risk assets, rising yields would normally be bad news. Higher bond yields raise the hurdle rate for equities and crypto and increase borrowing costs across the economy. But Farrell argues the pressure may be reaching the point where policymakers have little choice but to intervene.
That is where the Bitcoin thesis gets interesting. Farrell highlighted Treasury Secretary Scott Bessent’s move to increase buybacks of longer-dated Treasuries while funding those purchases through shorter-term bills as an example of the type of policy response he believes could become increasingly important.
In Farrell’s view, shifting financing toward Treasury bills while reducing pressure on the long end of the bond market amounts to a form of financial repression designed to keep government borrowing costs manageable.
“It leads to monetary debasement,” Farrell said. “And monetary debasement leads to Bitcoin outperformance.”
But that does not mean Farrell expects an overnight currency crisis or a sudden collapse in the dollar. He described the process instead as a “melting ice cube,” where the erosion of purchasing power happens gradually over years rather than all at once.
That dynamic has long formed part of Bitcoin’s investment case. What Farrell believes may be changing now is the urgency of the fiscal pressures behind it.
The tension is particularly notable because Bitcoin has continued to recover even as long-term rates have remained elevated. Rather than being crushed by rising yields, Bitcoin has begun showing signs that investors may increasingly view it as a hedge against the policy response those yields could ultimately provoke.
Farrell also sees evidence that Bitcoin’s technical picture has changed.
He pointed to Bitcoin reclaiming its 200-day moving average after spending an extended stretch below it, historically a constructive signal. More importantly, Farrell said Bitcoin recently broke through its 50-week moving average, a longer-term level he views as a more significant indication of a potential regime shift.
“That is normally a signal of a longer-term regime shift,” Farrell said.
The move could also put Bitcoin and Ethereum back on the radar of trend-following strategies, creating another source of incremental capital flowing into crypto as prices continue to strengthen.
That is why Farrell believes investors should be prepared to buy weakness rather than fear it.
If Bitcoin were to pull back around 10%, he said, there would likely be plenty of investors “chomping at the bit” to enter at lower levels.
“I do think you’ll want to buy that dip,” Farrell said.
Farrell had entered the year thinking Bitcoin could return to roughly $115,000. He now believes that target may be too ambitious before the end of 2026, but he still sees a move back through six figures as achievable.
“I actually do think we could get above that $100K level before 2026 wraps up,” he said.
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