Bitcoin’s dizzying bullshit shows no signs of slowing, despite a rise in US government bonds.
The cryptocurrency market leader set a new lifetime high of $ 51,348 early Wednesday after hitting the $ 50,000 psychological level for the first time on Tuesday, according to CoinDesk 20 data. Prices rose by 53% this month alone.
The latest move comes on the heels of an announcement by publicly traded company MicroStrategy that it intends to increase its bitcoin stash again. The firm on Tuesday announced a $ 600 million debt sale that will fund the additional purchases. The business intelligence firm has been buying bitcoin since August 2020 and has a profit of more than $ 2 billion on its holdings.
According to Avi Felman, Head of Trading at BlockTower Capital, the announcement of MicroStrategy was possible time to force a break above the critical level of $ 50,000. The firm made a similar announcement on December 7, after which bitcoin crossed the then large $ 20,000 barrier.
It remains to be seen whether the latest move above $ 50,000 is sustainable as US yields rise and gold pushes lower. Bitcoin is widely regarded as a hedge against inflation like gold.
Yields on the 10-year treasury note peaked at 1.33% in 12 months early today and rose more than 20 basis points. Gold is currently trading at a minimum of two weeks at $ 1,790 per ounce. However, Bitcoin is showing resistance and may come under pressure if and when real or inflation-adjusted yields rise.
According to data provided by the US Treasury Department, the 10-year effect from inflation-adjusted terms yielded -1%.
“Momentum funds that bought bitcoin as a hedge against inflation could sell if real yields rise,” Felman told CoinDesk.
Perceived storage assets usually move in the opposite direction of the right returns. For example, in the five months to August, gold rose more than $ 600 to a record price of $ 2,075 as US real yields fell from 0.55% to -1.08% over ten years. Bitcoin has characterized a staggering march over the past 11 months, coupled with a continued decline in returns.
However, yield increases may be limited, as the Federal Reserve has an open program for buying bonds, and that inflation is likely to increase the rise in oil prices.
At press time, bitcoin was trading at around $ 50,946, up 3.6% in 24 hours.