Bitcoin Will Act More Like Gold And Treasury Bonds

Bitcoin will act more like gold and Treasury bonds during a market recovery, according to analysts.

According to Bloomberg Intelligence’s most recent analysis of the cryptocurrency market, Bitcoin may soon start to behave more like gold and U.S. Treasury bonds than it does like stocks.

The research division compared the Bitcoin market to those of gold, bonds, and oil in its August Crypto Outlook report, which was written by Senior Commodity Strategist Mike McGlone and Senior Market Structure Analyst Jamie Coutts.

It is a possibility that Bitcoin will act more like gold and Treasury bonds, as strong indicators exist to support such a claim. The authors proposed that Treasury bond markets and Bitcoin have similarities because of macroeconomic factors like the Federal Reserve’s monetary policies:

“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 US Treasury bonds than stocks.”

In addition, they noted that the “dump-following-pump characteristic of commodities” and falling bond yields point to a higher likelihood that bonds, gold, and Bitcoin will gain as inflation declines.

Is the Flush Done? Booms, Busts and #Bitcoin vs. #Gold, #Bonds, #Oil — Whether the ebbing tide has subsided for most assets is the top binary issue for 2H, and in most scenarios, Bitcoin and Ethereum appear poised to come out ahead. Link to Pdf:https://t.co/iFSCZIULHe

— Mike McGlone (@mikemcglone11) August 3, 2022

Long-term government debt instruments issued by the U.S. Treasury Department are known as Treasury bonds or T-Bonds. They mature over intervals of 20 to 30 years and have a fixed rate of return.

According to the research, cryptocurrency markets had their biggest discount to the 100-week moving average in July. The fact that Bitcoin is holding considerably below its 200-week moving average is odd, it was stated in the research. BTC has recently recaptured the 200-week moving average, which is located at $22,827 and is presently trading 1.2 percent higher on the day at $23,1502.

They identified the $20,000 region as a crucial support and stated that they anticipate a basis to be developing, comparable to the $5,000 level in 2018–19.

The experts noted that since its launch around ten years ago, Bitcoin has been among the best-performing assets, adding:

“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.”

According to research conducted by Coinbase in July, the risk profile of the cryptocurrency asset class is comparable to that of oil and technology stocks. Since the 2020 epidemic, the link between the stock and crypto-asset prices has dramatically increased, according to Cesare Fracassi, the chief economist at Coinbase.

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