Sunday, January 29, 2023
HomeMarketBitcoin price exceeded 57,000 dollars according to inflation expectations due to economic...

Bitcoin price exceeded 57,000 dollars according to inflation expectations due to economic indicators released

The 10-year U.S. bond yield, which has risen sharply in the last few days, has been somewhat smooth, as major economic indicators in the United States have been found to be below expectations. Thanks to this, the price of Bitcoin exceeded 57,000 dollars on the 11th.

One of the indicators that played an important role in the price of bitcoin is the increase rate of the U.S. CPI for February, which was announced on the 10th. The market forecast for this was a 0.2% increase from the previous month and 1.4% from the previous year, but the actual published indicators rose 0.1% from the previous month and 1.3% from the previous year.

Correlation between Bitcoin Price and US Treasury 10-Year Yield

The index that has the most influence on the recent bitcoin price is the 10-year U.S. Treasury bond rate.

The 10-year U.S. Treasury bond yield fell to 1.61% on the 8th, and then fell to 1.50% on the 11th. During the same period, Bitcoin rose about 15.5% from $49,500 to the $57,000 level.

The most common reason for this correlation is’anxiety’ about the financial market. Since the outbreak of Corona 19 last year, the global financial market has been rapidly growing and soaring with anticipation for liquidity supply and pendemic solution from central banks in each country.

However, if liquidity becomes oversupplied gradually, there is a risk that it will lead to a natural “inflation rise”. Future inflation is expected through changes in the interest rate of long-term bonds, such as 10-year US Treasury bonds, so Treasury bond yields become an important indicator for assessing the’risk’ of inflation.

Inflation indicators continue to pay attention in the future !

As the core consumer price index for February, announced on the 10th, came out below institutional estimates, the daily surge in bond yields has eased, but there is still a risk of a’increased inflation’.

Rick Ryder, chief investment officer at Black Rock, the world’s largest asset management firm, pointed out that although the February inflation indicators were relatively stable, strong inflation may occur in the future, and the Federal Reserve may eventually have to adjust its ultra-low interest rate policy.

Meanwhile, global indicators related to’inflation’, which have a big impact on the price of bitcoin, will be additionally disclosed today (11th) and tomorrow (12th). In addition, the European Central Bank (ECB) plans to announce its interest rate decision through a policy meeting. At the press conference scheduled immediately after the interest rate decision, what does the ECB think about inflation? Will it continue to maintain its current economic stimulus stance in the future? The position on the back may also be revealed.

On the 11th, a 30-year U.S. government bond bid will be held. If the 30-year Treasury bond bid is completed at an acceptable level, there is a possibility that’short covering’ for short selling of bonds, which was expected to increase interest rates in the bond market, could occur.


Most Popular