The latest crypto market research from Bloomberg Intelligence suggests that bitcoin may start behaving like United States (US) Treasury bonds and gold instead of stocks.
In its August Crypto Outlook report, authored by senior commodity strategist Mike McGlone and senior market structure analyst Jamie Coutts, the research unit compared the bitcoin markets to the gold, bond and oil markets.
The authors suggested that the Treasury bond market and bitcoin have similarities as a result of macroeconomic influences such as the Federal Reserve’s monetary policies:
“Tightening markets and falling global growth supported a change in the Federal Reserve’s “meet by meeting” bias in July, which could help steer bitcoin toward a directional tilt more like that of US Treasury bonds than stocks. .
He also noted that the “dump-following-pump nature of commodities” and declining bond yields suggest that bonds, gold and bitcoin are more likely to rise when inflation subsides.
Is it flushed? boom, bust and #bitcoin Vs #Sleep, #bond, #Oil – Whether volatility has eased for most assets is the top binary issue for 2H, and Bitcoin and Ethereum are set to come out ahead in most scenarios. Link to PDF: https://t.co/iFSCZIULHe
— Mike McGlone (@Mike McGlone11) 3 August 2022
Treasury bonds, often referred to as T-bonds, are long-term government debt securities issued by the US Treasury Department. They have fixed rate of return and maturity period ranging from 20 to 30 years.
The report states that the crypto market reached its biggest discount compared to the 100-week moving average in July. It added that “it is unusual for bitcoin to remain well below its 200-week moving average.” BTC is currently trading up 1.2% at $23,1502, having retested the 200-week SMA at $22,827.
The fact that BTC was down 70% from its peak in early August, but still more than five times from its March 2020 lows “shows its potential,” analysts said.
He marked the $20,000 area as key support and expects a base to form, which is similar to the $5,000 level in 2018-19.
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The researchers concluded that bitcoin has been one of the best-performing assets since its inception nearly a decade ago, adding:
“We think there is more to come, especially as it transitions to global collateral, with results more aligned with Treasury bonds or gold.”
Coinbase research conducted in July indicates that the risk profile of the crypto asset class is similar to that of oil and tech stocks. According to Cesare Fracassi, Chief Economist at Coinbase, “the correlation between stock and crypto-asset prices has increased significantly” since the 2020 pandemic.
