Pros & Cons of the Bitcoin bull
Pro: The NUPL (Net Unrealized Profit/Loss) Formula
The NUPL formula suggests Bitcoin is still far from the top.NUPL=(Market Cap−Realized Cap) / Market Cap
Market Cap:
The current Bitcoin price multiplied by the total circulating supply.Realized Cap:
The sum of the value of each Bitcoin at the price it was last moved (i.e., purchased or transferred), calculated across all coins in the networkPositive NUPL (> 0): Most holders are in profit.
Negative NUPL (< 0): Most holders are at a loss.
The NUPL indicator captures market psychology and helps identify cycle highs (potential selling zones) and lows (potential buying opportunities).
We are in the late stage of the cycle which suggests we are potentially in the equivalent of 2013, 2017, or 2021 when Bitcoin had climax tops. If such occurs again, and it is likely we will given institutional involvement, we could see Bitcoin as high as $500,000 but only for a brief moment since climax tops are volatile. Bitcoin could quickly retrace 1/2 to 2/3 of its gains, bringing it back to somewhere between $170-250k where it then finds lower lows until it forms a long base once again.
Con: The bond market
The black swan in the room is the bond market. Bond yields across Japan’s 20-, 30-, and 40-year maturities have surged to historic levels. The 40-year yield just hit 3.689%, and the 30-year reached 3.15%. For Japan, a country used to near-zero rates for decades, this is a major issue.
Japan’s debt-to-GDP ratio, a key measure of national debt compared to the size of its economy is now about 260%. That’s worse than any other developed country. Inflation has also returned to Japan which hit 3.6% in March 2025 and has been above the Bank of Japan’s 2% target for three straight years. Rising inflation eats away at the value of bond payments, making fixed interest less attractive. The BOJ will likely raise its inflation forecast at its next policy meeting because food prices are soaring, especially rice, which has doubled year-over-year, its biggest jump since 1971.
Until recently, the BOJ kept yields low through a policy called yield curve control, it bought huge amounts of bonds to cap interest rates. Now it’s ending that support. The BOJ is reducing its bond purchases, a process called quantitative tightening.
The triple threat of rising inflation, political pressure to spend more, and central bank retreat is hitting super-long bonds the hardest, namely the 30- and 40-year bonds.
Further, liquidity is drying up. For years, the BOJ owned over half of all Japanese government bonds. Now that it’s pulling back, there’s no one big enough to fill the gap. A Bloomberg index tracking bond market volatility just passed levels seen during the 2008 global financial crisis due to this lack of liquidity.
The selling is spilling over into U.S. treasuries. When Japanese yields rise, Japanese investors start selling their U.S. Treasuries and foreign assets to bring money home. That pushes up U.S. borrowing costs even if the Fed isn’t raising rates.
So U.S. debt is soaring, interest costs are exploding, inflation remains sticky, and politicians keep promising more spending forcing the Fed to walk a tightrope between tightening and panic.
In Japan, if the opposition cuts taxes, debt grows. If the ruling party spends more, debt grows faster. If the BOJ delays rate hikes again, markets lose even more trust. When markets stop believing a government can control its debt or inflation, they revolt. And that revolt starts with bonds which could spill over into stocks and other assets such as Bitcoin.
| Event/Factor | Expected Timing | Likely Market Impact |
|---|---|---|
| Japan's Upper house election | July 20, 2025 | Fresh volatility, possible bond selloff |
| Japan's 20-year bond auction | July 17–18, 2025 | Short-term yield & risk asset swings |
| Fiscal/monetary announcements | Post-election | Global risk aversion if deficits rise |
| Continued yield elevation | Next weeks/months | Periodic global stock/bitcoin corrections |
Such would likely be buying opportunities in stocks and Bitcoin as global liquidity remains firmly in place.
