As US Treasury two-year bond yields approach 5%, the highest level since the economic crisis and the birth of Bitcoin (BTC), BTC could face a prolonged decline, according to a seasoned analyst.
According to Bloomberg analyst Mike McGlone, this rise could pose a serious challenge for many risky assets, especially BTC, which was produced as a digital alternative to gold after the global recession.
McGlone's analysis, which focused on the 100-week moving averages, showed that Bitcoin has a clear rollover pattern and bearish trend similar to the US stock market in 1930. The analyst said the following regarding BTC:
“BTC, a breakthrough technology born in the wake of the financial crisis and extremely low interest rates, may be facing a long period of pullback.”
He added that while BTC may be attractive as a digital version of gold in a time of near-zero and negative interest rates, the world's safest securities, currently delivering around 10% total returns over two years, could change the landscape and suppress the prices of most assets with greater risk.
The analyst concluded his words as follows:
“The last time US Treasury two-year bonds yielded around 5% was before the financial crisis and the birth of Bitcoin, which may be a harbinger of the downside facing most risky assets.”
*Not investment advice.