According to the latest cryptocurrency market research from Bloomberg Intelligence, bitcoin (BTC) may start behaving more like US Treasury bonds and gold, rather than stocks.
In its August report, “Crypto Outlook,” written by Senior Commodity Strategist Mike McGlone and Senior Market Structure Analyst Jamie Coutts, the research unit compared bitcoin markets to those of gold, bonds and oil.
The authors suggested that similarities between the Treasury bond markets and bitcoin were a result of macroeconomic influences such as the Federal Reserve’s monetary policies:
Tighter markets and faltering global growth support the Federal Reserve’s shift to a meeting-by-meeting bias in July, which could help bitcoin pivot toward a direction closer to US Treasury bonds than actions.”
They added that the “dump-after-the-pump” nature of falling commodities and bond yields suggests that bonds, gold and bitcoin are more likely to be supported by falling inflation.
Is The Stream Done? Bombs, Busta and #Bitcoin vs. # Gold, #jumps, #oil — The top binary issue for 2H is whether the tide of exhaustion has run out for most assets, and in most cases, Bitcoin and Ethereum seem poised to come out ahead. Link to Pdf: https://t.co/iFSCZIULHe
—Mike McGlone (@mikemcglone11) August 3, 2022
Is the liquidation over? Bulls, Bears & #Bitcoin vs #Gold, #Bonds & #Oil — The top binary question for the second half of the year is whether the cart has bottomed out for most assets for the second half of the year, and in most cases Bitcoin and Ether seem to be coming. out on top. Link to PDF file: https://t.co/iFSCZIULHe — Mike McGlone (@mikemcglone11) August 3, 2022.
Treasury bonds, often referred to as T-Bonds, are long-term government debt securities issued by the US Treasury Department. They have a fixed rate of return and maturity periods from 20 to 30 years.
The report noted that cryptocurrency markets reached their biggest discount ever to the 100-week moving average in July. He also says that it is “unusual that bitcoin is well below the 200-week moving average. BTC is currently trading up 1.2% on the day at $23,1502 at the time of writing, and has just recovered the 200-week moving average, which sits at $22,827.
Analysts said that BTC is 70% below its early August peak but still five times higher than the March 2020 low “showing its potential.”
They cited the $20,000 area as key support and expect a base to be built similar to the $5,000 level in 2018-19.
Also read: Bitcoin targets a price of $25,000 when $510 million options expire on Friday
The researchers concluded that bitcoin has been one of the best performing assets since its inception about ten years ago, adding:
“We think the same thing is coming, especially because it could translate into global collateral, with greater returns coming from Treasuries or gold.”
Research from Coinbase in July shows that the risk profile of the cryptocurrency asset class is similar to oil and technology stocks. According to Cesare Fracassi, Coinbase’s Chief Economist, “the correlation between the price of stocks and the price of cryptocurrencies has increased significantly” since the 2020 pandemic.