Bloomberg Intelligence’s latest crypto market research suggests that Bitcoin (BTC) is beginning to behave more like US Treasuries and gold than stocks.
In the August “Crypto Outlook” report, authored by senior commodities 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 macroeconomic influences, such as the Federal Reserve’s monetary policy, have led to similarities in the government bond and Bitcoin markets:
Tightening markets and declining global growth are supporting the Federal Reserve’s shift towards a meeting by meeting bias in July, which could help turn Bitcoin into a directional tilt more akin to US Treasuries than equities. “
They also added that a “dump-follow-pump nature of commodities” and declining bond yields indicate an increase in the likelihood that bonds and gold and Bitcoin will be boosted as inflation slows.
Has the rinse been completed? Booms, Busts and #Bitcoin against #Gold, #Bonds, #Oil — Whether the ebb has abated for most assets is the main binary problem for 2H, and in most scenarios Bitcoin and Ethereum appear poised to move forward. Link to PDF:https://t.co/iFSCZIULHe
— Mike McGlone (@mikemcglone11) August 3, 2022
Treasury bonds, often referred to as T-bonds, are long-term government bonds issued by the United States Department of the Treasury. They have a fixed return and maturities ranging from 20 to 30 years.
The report noted that crypto markets hit their biggest ever discount compared to the 100-week moving average in July. It added that it is “abnormal for Bitcoin to remain well below the 200-week moving average.” BTC is currently trading 1.2% on the day at $23,1502 at the time of writing, having just regained the 200-week moving average, which is at $22,827.
The analysts said the fact that BTC was 70% below its peak in early August but still five times higher than its March 2020 low “shows its potential.”
They marked the $20,000 zone as key support and that they expect a base to be built, 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 about a decade ago, adding:
“We think more of the same is in store, especially as it may move to global collateral, with results more in line with government bonds or gold.”
Coinbase research in July indicates that the crypto asset class’s risk profile is comparable to that of oil and technology stocks. According to Cesare Fracassi, Coinbase’s chief economist, “the correlation between stock and crypto asset prices has risen significantly” since the 2020 pandemic.