Bitcoin Looks Beyond $10.5K as Global Bond Yields Collapse Below 1%
- Bitcoin eyes a close above $10,500 as investors hunt for better profits in precarious markets.
- The analogy appears as a little over 60 percent of the global bond market now yields less than 1 percent.
Bitcoin has started the new week with an incredible jump above $10,000.
The benchmark cryptocurrency rose by as much as 3.94 percent ahead of the European trading session. As it did, the price established an intraday high at $10,333 – a level last touched on June 1, 2020. A few hours later, a small correction ensued that brought the price some $100 lower.
Other factors, such as the anticipation of more stimulus to aid pandemic-hit countries, also lifted gold’s appeal as a hedge against fiat inflation.
“Silver, Gold, Bitcoin, etc all look to be ready to make explosive moves higher given the sheer amount of money printing going on around the world,” said Kyle Bass, chief investment officer at Hayman Capital Management in Texas.
Meanwhile, a crucial yet severely underperforming bond market also helped to raise the appeal of safe-havens. According to data fetched by Intercontinental Exchange, more than 60 percent of the $60 trillion global bonds yielded less than 1 percent as of June 30, 2020.
It serves as one of the primary reasons why even the stock market is doing well despite an uncertain macroeconomic outlook.
“Yield-chasing behavior has become much more pronounced,” Matt King, the global head of credit products strategy at Citigroup, told FT. “If you are a pension fund or an insurance company, you are forced to go down in quality and take extreme risks.”
A $10,500 Bitcoin
The unprecedented money supply left even the US dollar weaker against other national currencies. Bitcoin benefited from it.
On the other hand, the US government will finalize the second round of $2 trillion-stimulus to help the unemployed and businesses through the pandemic-induced lockdown. That would keep more pressure on the US dollar due to oversupply.
“Over $10.5 is where the real action starts but BTC is already looking pretty exciting,” he said Monday. “This slow-grindy action is a lot more productive than a rapid impulse.”
Bitcoin was trading at $10,251 at the time of this writing.
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