Canary Capital CEO Steven McClurg sees an opportunity in Bitcoin (CRYPTO:BTC) and other alternative assets even as he warns that 10-year U.S. Treasury yields could reach 8% within four years. His argument: rising borrowing costs could pressure debt-dependent companies and long-duration bonds, encouraging investors to seek alternatives — including cryptocurrency.
"The alternatives are TIPS, well-capitalized companies, commodities, and crypto (which do not issue debt)," McClurg said in an interview with MarketDash.
In his investment thesis, McClurg argues that persistent government borrowing, defense spending and the capital-intensive AI build-out could sustain upward pressure on long-term yields.
Why McClurg Is Watching Bitcoin
Higher interest rates can weigh on companies that rely on borrowing to fund operations and expansion. Meanwhile, rising yields can hurt existing bond prices, particularly those of longer-duration securities.
McClurg believes investors could look beyond these traditional investments toward assets that do not carry the same debt obligations.
His Bitcoin thesis also rests on global liquidity rather than a simple comparison with equities.
"Bitcoin has time periods correlated to equities, but most time periods are not. The greater correlation is to Global M2 money supply, which is currently growing at a 7% clip, and could grow more if central banks have to print their way out of debt," he said.
That distinction matters because higher interest rates do not automatically benefit Bitcoin. If tighter financial conditions strengthen the dollar, raise real yields or reduce investors' appetite for risk, cryptocurrency prices could come under pressure even as government debt expands.
Bitcoin ETFs Offer a Regulated Investment Route
Investors looking for exchange-traded exposure to Bitcoin could examine the iShares Bitcoin Trust ETF (NASDAQ:IBIT) and the Fidelity Wise Origin Bitcoin Fund (BATS:FBTC). Both seek to track Bitcoin's price, allowing investors to gain exposure through brokerage accounts without directly managing cryptocurrency custody, and both carry a 0.25% sponsor fee.
Asked whether he would rather own Bitcoin directly through a spot ETF or does he see a stronger opportunity elsewhere in the digital-asset ecosystem, if his higher-rate scenario plays out, he said that he prefers ETFs.
"ETFs generally charge no fees to trade with a $.01-.02 spread (2-4bps)," he said, contrasting them with exchange trading fees that he said could reach 40–150 basis points at Coinbase Global Inc (NASDAQ:COIN). Actual costs vary by platform, transaction size and market conditions, and ETF investors still pay fund expenses and bid-ask spreads.
The Liquidity Question
McClurg's outlook ultimately depends partly on how global money supply evolves. If central banks expand liquidity to manage mounting debt burdens, Bitcoin could benefit under his thesis. But that outcome is not guaranteed, and Bitcoin remains a volatile asset rather than a dependable hedge against rising rates.
For ETF investors, the key question is whether expanding global liquidity can support Bitcoin even as higher Treasury yields make conventional income-producing investments more attractive.
