Bitcoin May Gain as Dollar Drops and Bond Yields Climb, Experts Say

A weakening US dollar, rising governance risks and yield curve that is steep, create a bullish story for Bitcoin, according to a Thursday investment remark From the Singapore -based QCP Capital.

The US Dollar Index (DXY), which follows the value of the US dollar compared to a basket with foreign currency, has paid 11% of its value since the first half of this year and currently fluctuates around 98.23.

“This is the biggest decrease since 1973 – more than 50 years ago,” said Stephen Gregory, founder of Crypto -trading platform Vtrader, said Decrypt.

With gold that hit a record high of $ 3,578 on 3 September, Gregory said: “It is clear that American institutions cover the falling dollar.” The liquidity of gold is likely to continue in “fixed delivery assets such as Bitcoin and Ethereum,” he said.

The decrease in the US dollar comes in the midst of a sale of the bond market, in which experts mention inflation problems as the main reason for the increase in 30-year returns in the US, the VK, Australia and Japan.

“It is really unusual that a 30-year-old treasury yield is to rise in a FED-verseleling cycle,” Robin Brooks, a senior fellow at the global economy and development program of the Brookings Institution, tweeted On Wednesday.

Many countries have previously shifted their debt issue to short -term durations, which led to a global increase in long -term returns, Brooks noted in a subsequent tweet“A movement that may come back to chase us.”

In addition to maintaining a focus on short running times, most central banks worldwide have already started relaxing or anticipating further relaxation, so that the front-end remains anchored.

However, the recent sale of bonds has widened the gap between the revenues in the short and long term, which reduces the yield curve. In other words, investors demand a higher return to borrow money for longer periods.

Add to this complex mix are growing concerns about the independence of the Federal Reserve. President Donald Trump repeatedly put the pressure on reducing chairman Jerome Powell this year, in an attempt to serve the high levels of the US on his sovereign debt.

According to QCP, that fear is the reason why the premiums on the long side “stay higher, so that the yield curve rose.”

A steep interest curve “gives signals of increasing inflation expectations, but it can also indicate that investors believe that the economy will grow,” said Gregory.

With inflation in the increase, “risk activa such as Bitcoin tend to surpass the market,” he explained, “maybe this is the perfect background for a crypto -supercycle.”

Bitcoin’s year-to-date return fluctuates around 96%, a decrease of almost 11% compared to its record high of $ 124,545, Coentecko Data shows. However, gold reached a record high of $ 3,578 on Tuesday and this year has risen by 35%.