Are you seeing how a geopolitical war can turn into a financial crisis through the bond markets? That’s exactly what’s happening with the Iran situation and U.S. debt.

Since the conflict escalated at the end of February, yields on U.S. Treasuries have started to rise significantly. It’s no coincidence. Every time geopolitical uncertainty increases, investors demand higher premiums to lend money to the United States. And here lies the real problem for the Trump administration: as these yields rise, the cost of U.S. debt increases exponentially.

Padhraic Garvey of ING highlighted a detail that many traders ignore: the 10-year swap spread on Treasuries. This seemingly technical number is actually a warning bell for the financial system. We are currently below 50 basis points, but according to Garvey, if this spread were to exceed 60 basis points, we would start to see real problems. It’s not just a market perception issue; it’s a concrete measure of the deterioration of American credit quality. The higher the spread, the more expensive it becomes for the government to finance U.S. debt.

But there’s another level. The 10-year Treasury yield has risen about 45 basis points since the war began, reaching around 4.37%. According to The Kobeissi Letter, the critical range is 4.5%-4.6%. Do you remember Liberation Day in April 2025? When Trump started considering a pause on tariffs? Exactly when the yield surpassed 4.50%. This is no coincidence. It’s the point at which the costs of financing U.S. debt become unsustainable for policy.

But there’s an even more dangerous level: 5%. If the 10-year yield hits 5%, according to analysts like Arthur Hayes, we could be facing a mini financial crisis. At that point, the Federal Reserve would be forced to intervene with massive liquidity injections. And this is where Bitcoin comes into play.

Traditionally, when a financial crisis erupts, risky assets like BTC initially decline. People sell to raise liquidity. But what happens afterward is crucial: the Fed pumps money into the system, and Bitcoin, as a deflationary asset, benefits enormously from this monetary expansion. So the movement would be: initial dip, then a strong recovery.

On Monday, Trump suspended attacks on Iranian infrastructure, saying he had productive talks. But Tuesday morning, U.S. and Israeli forces struck new Iranian energy facilities. The signal is confusing, and the market hates uncertainty.

Here lies the real challenge for the U.S. government: continuing the war means risking Treasury yields rising above 4.5%-4.6%, forcing a political capitulation. Or it means risking reaching 5%, triggering a crisis that requires extraordinary Fed interventions. Both scenarios have huge implications for the cost of U.S. debt in the coming years.

For Bitcoin traders, the message is simple: monitor these numbers as if your life depended on it. The 10-year swap spread, the 10-year yield, credit spreads. These are the indicators that will determine the next major BTC move. When the Fed starts talking about interventions, when Treasury yields become unsustainable, that’s when Bitcoin really moves. It’s not just about halving cycles or adoption. It’s about macroeconomic dynamics and how much the system can tolerate before needing an escape valve. And that valve, historically, has always favored alternative and deflationary assets like Bitcoin at 72.91K. Keep an eye on the Treasury market. That’s where the real game is played.