Israeli Strike on Iranian Nuclear Facilities? Bitcoin's Rally Depends on This

Looking back from the final week of May, we can say with certainty—it has been a month of relentless turbulence. Whether in Bitcoin or equities, investors across all asset classes have been unable to rest easy. Volatility hasn’t just returned—it has overwhelmed.

It began with Moody’s downgrade of the U.S. credit rating, followed by a spike in Treasury yields. Then, just last week, former President Trump reignited geopolitical anxiety with a surprise threat: a 50% tariff on European automobiles.

In the span of just one to two weeks, global markets have been rocked by a succession of high-impact events, shaking asset prices and destabilizing sentiment.

To make matters worse, the dollar is weakening, while Treasury yields remain stuck above 4.5%, signaling not a passing storm but a deeper structural fragility.Trade negotiations that were supposed to make progress during the 90-day tariff truce have produced nothing but delay. And now, Trump’s voice is once again accelerating the pulse of the market.

“America can negotiate. But it won’t hesitate to draw its sword.”

This message isn’t just political bravado. It reveals the core of America’s evolving grand strategy—one that blends tariffs, financial stress, and geopolitical uncertainty to reassert dominance in a fractured global order.

Middle East Tensions Add Fuel to the Fire

At the same time, the situation in the Middle East has deteriorated rapidly.Israel has launched a full-scale military operation in Gaza, and the conflict now risks spreading to Syria, Iran, and Lebanon.What began as a localized crisis now threatens to become a regional war, and markets are approaching a new structural inflection point.

Ironically, this inflection is being met with a rebound in U.S. equities and risk assets—a move that may seem counterintuitive on the surface, but makes sense when we examine the deeper strategy America is pursuing.

The Tax Cut Bill: Not Just Fiscal Policy, but a Strategic Signal

The tax reform bill that passed the House last week is not simply a fiscal stimulus.It’s a message—a declaration that the U.S. is preparing to wage the economic front of the U.S.-China power struggle with full intensity.

America is executing a dual-track strategy:

1. Use tariffs to rewire global supply chains around the U.S.,

2. Deploy fiscal policy to fuel real domestic growth.

   
   

But there’s a critical constraint: debt.Over the next decade, the U.S. is projected to accumulate an additional $3.8 trillion in debt.At current yield levels, the cost of issuing this debt would be unsustainable—not just for the Treasury, but for the broader asset market.

This is why stabilizing Treasury yields has become an existential issue for U.S. policy.And thus, a fundamental question is being quietly asked behind the scenes:

“How can we bring foreign capital back into U.S. Treasuries?”

Tariffs and War as a Bridge for Capital Inflows

Coincidentally—or perhaps not—Trump’s sudden 50% tariff threat against Europe struck like lightning.This bold move cast a shadow over European investments, reawakening geopolitical risk premiums across developed markets.

Even if the threat doesn't materialize into action, it injects fear into global portfolios.And that’s the point: to raise doubts about non-U.S. markets and renew consideration of U.S. assets as a safe haven.

Then came the expansion of Israel’s military operations.Suddenly, risk appetite for Middle Eastern exposure fell.Global investors began to recalibrate: “Is capital truly safe outside the U.S.?”

The answer, increasingly, is no.And as fear grows abroad, demand for U.S. Treasuries rises.America is regaining its position not just as an economic leader—but as the epicenter of safety in a chaotic world.

🇺🇸 What the U.S. Really Wants: Capital Inflow and Growth Conversion

Ultimately, the U.S. wants one thing:For global capital to return—and be converted into domestic growth.Tariffs and military escalation are not the goal—they are tools in service of that objective.

Here is the strategy in one line:

Leverage global instability to attract foreign capital,then channel that capital into domestic manufacturing and high-growth technologiesto reclaim superiority in the U.S.–China rivalry.

 The Test: This Week’s 2–7 Year Treasury Auction

Where can we test whether this strategy is working?This week’s 2- to 7-year Treasury auctions will provide the clearest signal.

If the auctions are strong, it will suggest that Trump’s trade threats and the growing geopolitical crises have successfully redirected global capital flows toward U.S. debt.

If the U.S. also posts better-than-expected GDP growth this week, the dual narrative of"liquidity returning" + "growth confirmed" will be complete.

And in that moment, America will re-emerge as the destination of choice for global capital.

What This Means for Bitcoin and Equities

If this capital flow materializes, it won’t just be Treasuries that benefit.Bitcoin, U.S. tech stocks, and other risk assets will likely surge as liquidity rises and confidence returns.

So for investors, the key question now is simple:

Will capital flow back into the U.S., or not?

The answer to that will determine whether we see further upside—or another wave of volatility.

That’s why this week’s Treasury auction and economic indicators deserve our undivided attention.