Is there any correlation between the soaring Bitcoin futures interest and the falling bond yields? Matthew Dibb of Stack thinks so. His firm provides information on cryptocurrency, and his latest comments come amid a falling bond market that is struggling with declining yields.
Traditional markets today do not offer sound investment opportunities. At the same time, investors realize the financial potential of cryptocurrencies. No wonder that Bitcoin futures are witnessing a record rise while the conventional bond yields are moving lower every day.
Bitcoin futures look promising in an uncertain market
As per Skew data, the crypto open interest in futures touched a record high of $5.6 billion last week. This is a significant jump from the July low, which stood at $3 billion. From NYSE to CME, exchanges across the board are reporting higher open interest in futures.
Source: Skew
Matthew believes that increasing open interest reflects the participation of institutional investors. Traders with deep pockets are accumulating crypto long positions since traditional markets don’t offer any rewarding traders. Add rising volatility and falling bond yields to this mix, and the crypto realm looks promising even to old-school traders.
Turbulent traditional markets to drive BTC price higher
The quest for higher returns is driving the rising interest in Bitcoin futures. Investors are looking for the next set of opportunities. Currently, equities are sending an overbought signal, and bond yields are continuing their journey downwards. Once they touch negative territory, it is only a matter of time when traditional markets would turn head over heels.
Source: TradingView
The 10-year US Treasury note gives a 0.50 percent yield. The phenomenon is not just limited to the United States alone. Bond yields are currently at historic lows in all the countries, including Japan and Germany. In such a depressing environment, Bitcoin has emerged as a potential safe-haven asset.
Falling #Treasury bond yields were a much better forecaster of economic woes in the first quarter than stocks, and still portend a very deep "L" recession that will stretch into 2021. My newest INSIGHT report lays it all out.
— A. Gary Shilling (@agaryshilling) May 29, 2020
Matthew thinks that the worsening state of the global economy will push Bitcoin to fresh new highs. Investors would undoubtedly like to preserve their wealth in the digital sphere and away from the turbulent traditional markets.
