Bitcoin is gaining traction as US Treasury yields decline, particularly for bills maturing in three months. Following the Federal Reserve's interest rate cut on September 18, Treasury yields have been dropping, while gold has appreciated by nearly 5%. Analysts at CryptoQuant believe this trend may also benefit bitcoin, often dubbed 'digital gold.'
In 2008, a decrease in 13-week Treasury bill yields correlated with a surge in gold prices, which rose from $590 to a peak of $1900 per ounce by 2011. Currently, gold has risen from $2000 to almost $2700, suggesting a similar potential rise for bitcoin.
According to CryptoQuant analyst J.A. Maartunn, the decreasing 13-week US Treasury yields are contributing to an increase in safe-haven assets like gold. He noted, 'Falling yields often coincide with other economic indicators, such as recessions and shifts in the money supply (M2).' During the previous recession from 2007-2009, the M2 money supply significantly increased, driving demand for safe assets.
Speaking to The Block, Bitwise's André Dragosch remarked that the global money supply has reached an all-time high. Historically, such increases have been followed by bullish trends for bitcoin. Dragosch stated, 'We expect these rate-cutting expectations will positively influence bitcoin and cryptoassets.'
As of now, bitcoin's price has seen a modest increase of 1.4% in the last hour, currently sitting at around $61,114.
Disclaimer: The Block operates independently, delivering objective news and research about the crypto industry. This article is for informational purposes only and not intended as financial advice.
