Bitcoin can act as global collateral and behave like treasury bonds

  • Bloomberg analysts predict Bitcoin could slowly lose its correlation to stocks and become a competitor to US Treasuries.
  • Analysts also note that Bitcoin is unlikely to trade below its 200-week moving average for long.

Bloomberg Intelligence recently published its “Crypto Outlook” report for the month of August. According to Bloomberg’s Crypto Market Research, Bitcoin is set to play a bigger role in global finance.

Bloomberg is quite confident that over time Bitcoin will emerge as a hedging asset and behave more like gold and Treasuries, while decoupling from stock market performance. US Treasury Bills, called T-Bonds, are government debt securities with a fixed rate of return and maturity periods of 20 to 30 years.

Bloomberg Senior Commodity Strategist Mike McGlone and Senior Market Structure Analyst Jamie Coutts provided detailed analysis.

They compared Bitcoin markets to those of bonds, gold and oil. Additionally, they also noted that current macroeconomic factors and Fed actions have resulted in greater similarities between Bitcoin and the Treasuries market. The Bloomberg Intelligence report notes:

Tighter markets and falling global growth support the Federal Reserve’s shift to a meeting-by-meeting bias in July, which could help pivot Bitcoin into a directional tilt closer to US Treasuries than US Treasuries. shares.

Bitcoin has been one of the best-performing assets since its inception around a decade ago, and we believe it is, especially since it may be moving to global collateral, with results more in line with Treasuries or gold.

Bitcoin Could Be Preparing For The Biggest Bull Run

In the report, Mike McGlone explains that Bitcoin is unlikely to stay below its 200-week moving average for very long. Thus, they noted that July was the biggest discount ever for Bitcoin investors. Both analysts wrote that the risk/reward ratio is very much in Bitcoin’s favor and could pave the way for one of the biggest bull markets in history.

At press time, Bitcoin is currently trading at $23,081 with a market capitalization of $441 billion. Thus, it is currently trading above its 200-week moving average of $22,827.

Analysts also noted that BTC was trading at a 70% discount from its all-time high. But it was still five times higher than the March 2020 low. This shows “huge potential” in BTC. The report notes:

There is no doubt that the breakthrough asset that never stops trading and is no one’s project or responsibility earns the status of a major risk indicator. It’s a matter of what Bitcoin will signal, and our bias is that the crypto is turning into a store of value with the potential to act as a high-beta version of US Treasuries or gold.