Bitcoin May Be Behaving More Like US Treasuries: Bloomberg Intelligence
The latest crypto market survey by Bloomberg Intelligence suggests that Bitcoin may start behaving more like US (US) Treasuries and gold, rather than stocks.
In its August Crypto Outlook report, written by senior commodity strategist Mike McGlone and senior market structure analyst Jamie Coutts, the research unit compared Bitcoin markets to gold, bonds and oil.
The authors suggested that macroeconomic influences such as the Federal Reserve’s monetary policy have resulted in similarities in the government bond markets and Bitcoin:
“Tight markets and slowing global growth support the Federal Reserve’s move to a “meeting for meeting” bias in July, which could help turn Bitcoin toward a directional tilt more like US Treasuries than equities.
They also added that a “dump-follows-pump nature of commodities” and falling bond yields suggest an increase in the likelihood that bonds, gold and Bitcoin will strengthen as inflation eases.
Is the flush finished? Booms, busts and #Bitcoin vs. #Gold, #Bonds, #Oil — Whether the ebbing tide has receded for most assets is the key binary issue for 2H, and in most scenarios Bitcoin and Ethereum look to come out ahead. Link to pdf: https://t.co/iFSCZIULHe
— Mike McGlone (@mikemcglone11) 3 August 2022
Treasury bonds, often called T-Bonds, are long-term government debt securities issued by the US Treasury Department. They have a fixed return and maturity periods from 20 to 30 years.
The report noted that crypto markets hit their biggest discount ever compared to the 100-week moving average in July. It added that it is “abnormal for Bitcoin to hold much below its 200-week moving average.” BTC is currently trading up 1.2% on the day at $23.1502, having reclaimed the 200-week moving average, which sits at $22.827.
The analysts said the fact that BTC was 70% below its peak in early August, but still five times higher than its March 2020 low “shows the potential.”
They flagged the $20,000 zone as key support and that they expect a base to build, similar to the $5,000 level in 2018-19.
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The researchers concluded that Bitcoin had been one of the best-performing assets since its inception about a decade ago, adding:
“We think more of the same is in store, especially as it could shift to global security, with results more in line with Treasuries or gold.”
Coinbase research conducted in July indicates that the risk profile of the crypto asset class is similar to that of oil and technology stocks. According to Coinbase Chief Economist Cesare Fracassi, “the correlation between stock and crypto asset prices has risen significantly” since the 2020 pandemic.
