Bloomberg senior commodity strategist Mike McGlone has reiterated his bullish prediction for Bitcoin (BTC) on Twitter yesterday. In a continuation of his previous analysis, McGlone brought in another factor that will likely boost the chances of a bull run in gold and BTC in the second half: 30-year-old US bonds.
McGlone Cites 30-Year US Bonds Persisting Under 2% as Bullish Indicator for BTC
Bitcoin might be struggling to break $50,000 at the moment but McGlone has projected that investors frenzy will drive its prices higher in the second half of 2021. The financial analyst cited 30-year old US bonds to elaborate on his forecast.
In a recent tweet, McGlone proposed that if the rate of return offered by long bonds remains below 2%, it could have “bullish implications” for both Bitcoin and gold.
Notably, McGlone has stated in a previous analysis that both Bitcoin and US Treasury long bonds have had substantial corrections that “favor responsive buyers, rather than encouraging new shorts.”
Impact of Declining Bond Yields on Bitcoin
After a large part of the world began locking down in the face of covid last year, the Federal Reserve deployed emergency measures that changed the bond market. There was a drastic decline in annual yields and institutional investors were left with few options to resist inflationary pressures.
Things became dire when return rates on longer-dated bonds breached below 2%. This was a real game-changer for cryptocurrencies as investors started to look for riskier alternatives.
Now markets are looking forward to Fed chair Jerome Powell’s address at the upcoming Jackson Hole meeting for any hints of tapering of the $120 billion bond-buying policy.
Meanwhile, yields on long bonds have remained below 2%, despite growing anticipation around the event. This could be attributed to lingering uncertainty about the economy amidst rising cases of Delta variant.