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Bitcoin bulls face a tougher setup as rates stay a headwind
CoinDesk notes that yield-adjusted measures for bitcoin and Nasdaq have not surpassed their 2020 to 2021 peaks, even as bitcoin in dollar terms hit a record high over the past 12 months.
CoinDesk highlights a rate sensitive backdrop for bitcoin as BTC regains momentum, pointing to a divergence between nominal price strength and valuations adjusted for the cost of capital.
The outlet says the BTC versus the U.S. 10 year yield, and the Nasdaq versus the same yield, have not exceeded their 2020 to 2021 highs, implying that the more meaningful macro valuation peaks for both bitcoin and the broader tech complex likely occurred in that earlier period.
CoinDesk argues bull runs could play out in two ways: either interest rates fall sharply, or the dollar prices of bitcoin and tech decline to realign with weaker, yield adjusted valuation signals.
It also links the challenge to persistent inflation risk, citing recent Fed rhetoric described as hawkish, along with a resurgence in energy prices that has outperformed even aggressive risk assets, while bitcoin’s bounce from about $58,000 to $66,000 has still left its relative strength versus WTI crude lower, raising the possibility of a rapid nominal price snap adjustment if oil keeps rising.
Latest closeWTI crude $87.52 ▲3.1%|Bitcoin $65,920.00 ▼0.9%|Nasdaq Comp. 25,837.21 ▲1.3%