I was watching movements in the bond market this week, and I have to say the situation is becoming interesting. The war in Iran continues to push U.S. Treasury yields higher, and frankly, this could have huge implications not only for Trump’s policies but also for those trading Bitcoin.

The point is this: while fighting continues, U.S. Treasury yields have reached multi-month highs. This isn’t just a number on a screen—these yields represent the actual cost the U.S. government must pay to finance the debt. And when they rise, the market is essentially saying it perceives more risk.

Now, analysts are talking about two critical thresholds. The first concerns a little-known swap spread on 10-year government bonds. According to ING, if this spread exceeds 60 basis points, we could be looking at serious problems. Padhraic Garvey, who follows these markets for ING, explained that it’s not just a matter of perception—when these spreads widen, the implicit cost of financing federal debt increases concretely. Currently, we’re just below 50 basis points, so we’re not yet in critical territory, but we’re getting close.

The second threshold is the one everyone is watching: the 10-year government bond yield. Since the end of February, when this escalation began, the yield has risen by about 45 basis points and now sits at 4.37%. According to market observers, the 4.5%-4.6% range is a crucial line. Remember the April 2025 Liberation Day? When the yield on the 10-year notes surpassed 4.50%, Trump began considering a pause on tariffs. Once it reached 4.60%, he officially implemented a 90-day pause. This suggests the bond market has a real influence on political decisions.

But there’s an even more worrying level. If the yield were to rise to 5%, according to several analysts we could be facing a mini financial crisis. Arthur Hayes pointed out that the U.S. economy simply can’t support such high yields on government bonds. At that point, the Fed would be practically forced to intervene with liquidity injections.

This is where Bitcoin comes into play. If things were to get worse and the Fed were forced to print money, BTC could first suffer an instinctive drop—the classic risk-aversion move. But liquidity injections could quickly revive the bulls. Currently, bitcoin is around $72,860, and it’s already reacting to these moves in the bond markets.

The question I’m asking myself is: how far can this escalate? If yields keep rising, the Trump administration could find itself facing a difficult choice. Ease the conflict or risk a financial crisis? On Monday, Trump suspended attacks on Iranian infrastructure, saying he had productive talks—although Iran denied it all. But Tuesday morning, U.S. and Israeli forces struck new Iranian energy facilities. This back-and-forth suggests that pressure from the bond market could indeed be influencing geopolitical decisions.

For traders, the message is clear: closely monitor the yields on government bonds and the swap spreads. These numbers could determine whether risk appetite stays high or whether we see a correction. Government bonds aren’t just financing instruments—they’re the thermometer of global economic and geopolitical health. And right now, that thermometer is rising.