The latest crypto market research from Bloomberg Intelligence suggests that Bitcoin (BTC) will behave more like United States Treasury bonds.
The U.S. Treasury bonds (T-Bonds) are long-term government debt securities having a fixed rate of return with maturity periods ranging from 20 to 30 years.Â
Senior commodity strategist Mike McGlone and senior market structure analyst Jamie Coutts jointly compared Bitcoin markets, gold, bonds, and oil. Following the detailed comparison, the authors revealed that macroeconomic influences such as the Federal Reserve’s monetary policies have pivoted in similarities between Bitcoin and Treasury bond markets.Â
“Tightening markets and plunging global growth support the Federal Reserve’s shift to a ‘meeting by meeting’ bias in July, which may help pivot Bitcoin toward a directional tilt more like U.S. Treasury bonds than stocks.”
The strategists also suggested that a “dump-following-pump nature of commodities” and receding bond yields majorly hint at an increase in the probability of bonds, gold, and Bitcoin being sustained as inflation decreases.
Are Macro Factors Good for Bitcoin Price Action
Several Crypto pundits have viewed macro factors leading to the crypto crash as a positive sign for the industry.
Erik Voorhees, a co-founder of Coinapult and CEO and founder of ShapeShift, stated that the recent crypto crash was the least problematic to him, as it was the first crypto crash due to macro factors outside of the crypto space.
Alliance DAO core contributor Qiao Wang also made similar comments, stating that previous cycles were due to “endogenous” factors such as the fall of Mt. Gox in 2014 and the bursting of the initial coin offering (ICO) bubble in 2018.
The report stated that crypto markets reached their greatest-ever discount compared to the 100-week moving average in July. It also added that it is absurd to see Bitcoin holding much below its 200-week moving average.
The analysts flagged the $20,000 zone as a crucial support and that they expect a base is building, very similar to the $5,000 level in 2018-19. The fact that BTC was 70% down from its peak at the start of August but still five times higher than its March 2020 low mulls its future potential
However, the researchers believe that Bitcoin has been one of the best-performing assets since its inception,
“We think more of the same is ahead, particularly as it may be transitioning toward global collateral, with results more aligned with Treasury bonds or gold.”
In July, the research carried out by Coinbase indicated that the risk profile of the crypto asset class is similar to that of oil and tech stocks. As per Coinbase chief economist Cesare Fracassi, “the correlation between the stock and crypto-asset prices has risen significantly” since the 2020 pandemic.
