The latest crypto market research from Bloomberg Intelligence suggests that Bitcoin (BTC) may start behaving more like US Treasuries and gold, rather than stocks.
In the August Crypto Outlook report, penned by chief commodity strategist Mike McGlone and chief market structure analyst Jimmy Coates, the research unit compared the bitcoin markets to those of gold, bonds and oil.
The authors suggested that macroeconomic effects such as the monetary policies of the Federal Reserve led to similarities in the Treasury and Bitcoin markets:
“Tightening of markets and lower global growth support the Fed’s shift to a ‘meet-by-meeting’ bias in July, which could help steer bitcoin toward a directional bias more similar to US Treasuries than stocks.”
They also added that the “post-dumping nature of commodities” and declining bond yields suggest that bonds, gold and bitcoin are more likely to rebound as inflation falls.
Treasury bonds, often called T-Bonds, are long-term government debt securities issued by the US Treasury. They have a fixed rate of return and maturities ranging from 20 to 30 years.
The report indicated that the cryptocurrency markets reached their biggest discount ever compared to the 100-week moving average in July. “It is not normal for bitcoin to stay well below the 200-week moving average,” she added. BTC is currently trading 1.2% on the day at $23,1502 at the time of writing, having just retraced the 200-week moving average, which is at $22,827.
Analysts said that the fact that Bitcoin was 70% below its peak in early August but still five times higher than its March 2020 low “shows its potential.”
They have marked the $20,000 area as a major support and they expect to build a base, 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 more of the same is in the future, particularly as it may move toward global guarantees, with results more in line with Treasuries or gold.”
Coinbase research conducted in July indicates that the risk profile of the crypto asset class is similar to that of oil and technology stocks. According to Coinbase Chief Economist Cesar Fracasi, “the correlation between stock prices and crypto assets has skyrocketed” since the 2020 pandemic.
