Bitcoin Likely To Exhibit U.S. Treasury Bond Patterns: Bloomberg Intelligence
Amid the downtrend of the flagship digital currency, Bitcoin may show similar behavior to U.S. Treasury bonds. The latest Bloomberg Intelligence report on the state of the crypto market revealed an interesting insight.
According to the research, Bitcoin may behave like U.S. Treasury bonds and gold. The recent revelation differs from the widely held view that Bitcoin behaves like stocks.
Bloomberg Releases Crypto Forecast Report
The August Crypto Outlook report, written by Mike McGlone and Jamie Coutts, compared Bitcoin’s performance to other commodities. Gold, oil, and bonds are the three most common commodities often associated with Bitcoin.
According to the expert’s opinion, macroeconomics influences Bitcoin more than ever before. For emphasis, the activities of the U.S. Federal Reserve in terms of monetary policy have shown similarities between Bitcoin and Treasury bonds.
As a result, the Fed’s action has helped significantly pivot Bitcoin towards the direction followed by Treasury bonds rather than stocks.
The Bloomberg strategists also noted that the declining bond yields indicate the likelihood of Bitcoin, bonds, and gold being buoyed. As inflation decreases, commodities might experience an unprecedented rise in value.
Bitcoin’s status as a commodity has been debated. Still, the asset sits right there among other notable market items considered critical in market analysis.
What are Treasury Bonds?
Treasury bonds, referred to as T-Bonds, are government-issued long-term debt securities managed by the United States Treasury.
T-Bonds, unlike other securities, are long-term with a fixed rate of return and maturity periods. The typical duration may last anywhere between 20 and 30 years before maturing.
Meanwhile, the Bloomberg report shows that the crypto market has attained its greatest discount compared to last month.
Bitcoin has managed to maintain its stay below the 200-week moving average (M.A.). The flagship digital currency currently trades at $23,1502, up 1.2% for the trading session.
According to analysts, Bitcoin has shown its potential after being down 70% from its all-time high at the beginning of August. The fact that it still managed to stay five times higher than the March 2020 low value is a good performance.
Thus, the experts flagged $20,000 as a key support level with a base about to take over.
Despite the occasional downward trend, Bitcoin has remained among the best-performing digital assets for some years. It gradually becomes global currency collateral, making it more attuned to Treasury bonds.
Similar market research conducted by Coinbase in July shows Bitcoin’s risk profile in the same spot as oil and other stocks.
Reports also indicate that the correlation between crypto-asset prices and stock prices started in 2020. Due to the impact of the pandemic, the value of digital assets has become similar to that of other commodities.
On the whole, this has placed the largest crypto in terms of market cap on par with stock performance.
The broader crypto market may have been moving slowly due to the recent bloodbath, but the future is bright. Bitcoin is set to head the recovery of the industry back to its previous peaks.
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