- Bitcoin’s long-term bullish outlook may have received a boost from investors’ latest bet on the long-dated Treasury notes.
- The belief is that the Federal Reserve will start buying long-term U.S. bonds after its next policy meeting in December.
- The divided outcome of the November 3 elections left investors thinking that the central bank would need to undertake more responsibilities to support the U.S. economy.
- This is due to the rising number of coronavirus infections, coupled with the U.S. Congress’s inability to pass a second stimulus package.
- The U.S. economy is facing uncertain times after Treasury Secretary Steven Mnuchin ended some of the Fed’s key emergency lending facilities that were aiding small and medium-sized enterprises.
- That has left the central bank with no choice but to buy long-term U.S. Treasury notes. Growth in the long-term U.S. Treasurys decreases the yield they offer, meaning investors receive less money when their bond expires.
- Their towering demand makes inflation-resistant assets such as Bitcoin more attractive to investors. This explains why a yield below 1 percent on the U.S. 10-year Treasury has coincided with a 400 percent price rally in the Bitcoin market.
- Read the full story here.
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Matt Borelli
Matt Borelli is a staff writer at CoinChapter, covering the daily developments in the cryptocurrency world. He is a Bitcoin enthusiast and proud Dogecoin holder. When not reporting on the latest cryptocurrency news, Matt can be found at the nearest baseball stadium.
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