Bitcoin rebounds on risk-on mood
Bitcoin is bouncing back strongly as risk appetite returns to Wall Street as the bond market selloff appears to be over for now. Last week, surging global bond yields forced many institutional investors to close out some of their best-performing trades and for some that was Bitcoin. Bitcoin had a wrath of headlines that are noteworthy, but the primary driver still seems to be the calm in the bond market.
Another key story for Bitcoin was a new endorsement from a top bank, this time it was Citi. Citi put out a research note adding that Bitcoin could “become the currency of choice for international trade. The more banks that come out with constructive comments on Bitcoin, the more likely the speculative bubble will continue to grow.
An interesting development in China was the announcement that cryptocurrency mining projects in inner Mongolia, that use up massive amounts of computing power and energy will shut down in two months. Energy control measures are expected since China failed to meet their targets in 2019. Less cryptos being mined was another catalyst in this week’s strong start.
The cryptoverse over the weekend also saw many cryptocurrency traders make the plea to take your cryptos off the exchanges and keep them in your wallet. Traders normally put their cryptocurrencies on an exchange if they want to cash out.
Bitcoin’s wild ride is far from over, but it seems another attempt at USD50,000 could be in the cards if the bond rout is truly over. Bitcoin can survive a steady rise in Treasury, but not a skyrocketing move like we saw last week.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.
Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.
Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal.
Ed holds a BA in Economics from Rutgers University.
