The 10-year treasury note yield, moving in the opposite direction to price, exceeded 1.75% for the first time since January 2020. The rising yield was viewed by investors as a sign of market concerns about future inflation.
A growing number of investors say Bitcoin could serve as a good hedge against inflation, but the largest cryptocurrency is also viewed as a risky asset. Over the past few weeks, commentators have warned that higher yields on bonds, usually viewed as a safe investment, could make betting on riskier assets like stocks and bitcoin less attractive.
“US $ 57,400 remains our focal point,” wrote Matt Blom, head of sales and trading at the EQUOS cryptocurrency exchange, in an email. “Should Bitcoin stay above this level, the bulls will be happy to explore and push prices higher, targeting $ 60,780.” A pause could cause market trade to drop to just $ 53,360, he wrote.
Bitcoin briefly touched $ 60,000 early Thursday but was unable to maintain this market level.
Federal Reserve Chairman Jerome Powell told reporters at a news conference Wednesday that he saw no need to respond to rising government bond yields.
Some analysts say it may not matter too much to Bitcoin – if central banks and governments continue to burden financial markets with unprecedented levels of impetus.
Japanese broker Mizuho recently estimated that around $ 40 billion of the latest round of US government direct stimulus checks of $ 1,400 could be spent on bitcoin and stocks. German lender Deutsche Bank released a report this week stating that given its market capitalization of $ 1 trillion, Bitcoin “is now too important to ignore”.
Mati Greenspan, founder of forex and cryptocurrency research firm Quantum Economics, wrote Thursday that central banks are likely to “double up and support the economy” by devaluing the currency even if the federal government distributes helicopter money directly to their respective corporate citizens. “
Ether (ETH) was down 2.6% to $ 1,776, moving in line with Bitcoin.
For the past few weeks, the second largest cryptocurrency has been in a range between roughly $ 1,660 and $ 1,940.
The price is still well below the all-time high of over $ 2,000 that was hit in late March.