The mainstream media has extensively reported the decoupling of Bitcoin from gold and its inverse relationship with stocks, but the overall missing link is the impact of Bitcoin on US government bonds . Previously considered to be non-issued bonds, the negative bond yield has attracted the attention of analysts and investors on the chain.
Preston Pysh (Preston Pysh) is one of them, and Pysh recently said in a tweet, “People say that Bitcoin is just replacing gold. In general, this goal has not been achieved. This is about bonds. For everything, I still have to wish you good luck, and I hope you can persuade those who hold 100 trillion bonds (without yield) to continue holding them, because their future face value and coupons are locked in a fixed legal value. “
This shifted the focus from the battle between Bitcoin and gold to bonds. Enough people mentioned that Bitcoin’s price increase is comparable to the gold trend or the tech stock boom in the 1970s. The store of value as an investment choice is generally in short supply, and the emergence of Bitcoin is almost inevitable.
Although the battle between Bitcoin and gold seems to be starting to become a repetitive narrative for fund managers and traders, the bond market is suffering in a very different way.
Due to inflation, the inevitable negative interest rate and the negative correlation between the US dollar and the trend of Bitcoin give analysts more reasons to believe that the S2F model of cryptocurrency may be realized.
According to Bloomberg (Bloomberg) data on the yield of inflation-protected bonds, all bonds currently have negative yields, and municipal bonds are facing a similar fate. The currency devaluation set a precedent for the switch to Bitcoin as a U.S. Treasury reserve asset, which also explains Michael Saylor’s bold move to replace cash reserves with Bitcoin.
The current bond crisis is the impact of inflation. Due to rising inflation, bond yields are close to zero or even negative. It is expected that this situation will get worse as inflation rises.
Even before inflation rose sharply, many bond yields were negative. So where would the average investor or fund manager look for hedging?
It can be seen that investors have turned to an asset with a three-digit annual return rate-Bitcoin, and Bitcoin may be the most popular game right now.
Looking at the bond market, both Bitcoin and gold have received substantial investment from the decline in investor interest in bonds. One of the key narratives here is “bonds, a broken inflation hedge.”
The original text comes from ambcrypto, compiled by Blockchain Knight, the English copyright belongs to the original author, please contact the compiler for Chinese reprint.
