Bitcoin Bull Anthony Pompliano and Co-Founder of Morgan Creek Digital, to speak CNBC said in a recent interview that a rate hike by the Fed in 2022 is likely to have a different impact on Bitcoin price than many analysts originally predicted, which may correlate with an indicator.
“What I’m looking at right now and I don’t think we have enough data, but over the past few weeks I’ve seen some analysts say that Bitcoin price is really tracking / correlating the returns on 10 year US Treasury bills.
Traders monitor the performance of 10-year government bond yields to gauge investor sentiment and risk appetite.
Increasing returns indicate market confidence as investors choose riskier investments that generate higher returns. On the flip side, falling yields suggest market caution as investors turn to government bonds to protect their capital.
Several US Federal Reserve (Fed) officials recently said they plan to scale back asset purchases and raise interest rates this year to fight inflation.
Pompliano noted that such a policy could actually drive the price of Bitcoin higher if the correlation between 10-year government bond yields and Bitcoin is right.
“So you think now that most risk assets will actually sell out when interest rates go up, don’t you? Going back to the “99 dot com bubble”, many would suggest that interest rates were the key factor in creating this bubble. But if Bitcoin actually moves in parallel with the yields on 10-year government bonds – again we need more data – if that’s true, then a rate hike could drive Bitcoin up in a crazy way. “
Pompliano admits that some of his earlier predictions have not come true. In 2019, he predicts that Bitcoin will hit $ 100,000 by the end of 2021, based on the halving event in May 2020.
“One of the things I’m observing is that the 18 month timeframe can change. We might actually see a longer bull market instead of the 18 months it used to be. Time will answer. Looking back at the past is easier than predicting the future. But I think that should be kept in mind. “
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