This is a segment from the Forward Guidance newsletter. To read full editions, subscribe. It’s been an eventful day so far. Bitcoin hit a new record high of $109,888 this afternoon, right as a weak US 20-year Treasury auction sent stocks plummeting. Yield on 20-year notes hit 5.1% after today’s sale showed weaker-than-expected demand. The 30-year also rose 11 basis points to surpass 5% yield. The yield on the 10-year moved higher to 4.6%. The auction results come days after Moody’s downgraded the US from a triple-A rating to Aa1 last week. Given the relatively quiet economic calendar this week, it’s not surprising that US equities moved so much on today’s auction. The S&P 500 slid 1.2% around 1 p.m. ET on the auction results, while the Nasdaq Composite shed 1.4%, erasing gains from earlier in the session. Bitcoin pulled back slightly after it approached $110,000, but was still up about 1% over 24 hours at 2 p.m. ET. What is surprising, though, is to see bitcoin — consistently trading like a risk asset this year — on the rise despite increasing bond yields. A sell-off in Treasury notes typically coincides with a risk-off sentiment. And today, BTC traded like a safe haven. Before you get too excited, Noelle Acheson, author of the Crypto is Macro Now newsletter, cautions against calling this a “decoupling.” I’d have to agree. “More likely, we’re seeing building concern about a bond market ‘event’ triggered by Japan,” she wrote today. “The yield on its 30- and 40-year government debt has shot up over the past few days, and is now at record highs.” Yields on Japanese 30-year bonds hit a new high of 3.2% during Asian trading on Wednesday, according to London Stock Exchange data. Japan’s 20-year auction on Tuesday showed the weakest demand for the offering in more than a decade. The bond moves imply the Japanese yen is gaining strength against the dollar, 10T Holdings founder Dan Tapiero said. That could explain bitcoin’s rally. It’s hard to say, though, just how long this trend will last. Like I said, there isn’t much macro data to trade this week, but risk assets still face headwinds. The ongoing trade war has analysts pulling back on S&P 500 earnings expectations for the rest of the year. Plus, tariffs could still deliver a blow to the labor market and second quarter GDP — and so far, the Fed isn’t budging on interest rates. On the point about earnings projections, I’ll concede that estimates do typically decline later in the year; but the slashes this time around are pretty significant. Since the beginning of Q2, analysts have reduced their projected earnings growth rate for the S&P 500 from 8.9% to 4.8%, FactSet data shows. Tomorrow’s initial jobless claims will give us our next labor market update. First-time filers for the week ended May 17 are expected to come in at 230,000, a slight increase from the week prior. Of course, if BTC isn’t trading like a risk asset, HODLers don’t have to worry about these potential headwinds.