Bitcoin Could Benefit From ‘Flight To Quality’ Trend: Report

1 year ago

In the past 7 days, Bitcoin has gone up by 10.50%, pursuing a bid of important gains crossed the week. Most notably, the largest crypto asset surged by 7% connected Monday pursuing the emergence of fake quality connected the support of the BlackRock iShares Bitcoin Spot ETF.

As expected, this terms summation drew a plethora of reactions from assorted crypto enthusiasts and analysts.

In particular, Larry Fink, the CEO of BlackRock, stated successful an interrogation with Fox Business that the BTC surge was partially owed to the fake quality of the spot ETF support but besides due to the fact that of a increasing request for an concern harmless haven.

According to Fink, the expanding geopolitical tensions – citing the ongoing Israel-Palestine struggle – person created uncertainties driving investors to accepted assets specified arsenic gold, but besides crypto assets.

The BlackRock CEO describes this inclination arsenic a “flight to quality.”

Dissecting The Bitcoin ‘Flight To Quality’ Theory

Will Bitcoin Benefit From a "Flight to Quality”?

As US bonds look a historical sell-off, with 10-year yields hitting a 16-year precocious of 5%, investors are seeking alternate assets.
🔹 Long-term bonds person plummeted 20% successful 6 months and are down 53% since March 2020.
🔹 US debt… pic.twitter.com/ekaWjK5fs5

— IntoTheBlock (@intotheblock) October 20, 2023

Following Larry Fink’s connection earlier this week, blockchain analytics and probe steadfast IntoTheBlock has present posted a study evaluating the feasibility of Bitcoin arsenic a “Flight to Quality” asset.

In the station connected Friday, IntoTheBlock highlighted assorted factors that backed Fink’s claim. Firstly, the analytic steadfast stated that US bonds are experiencing a historical sell-off arsenic the 10-year yields connected semipermanent bonds deed 5% this week.

Generally, US bonds are considered 1 of the astir unafraid concern forms. However, developments specified arsenic this are usually termed arsenic negative. This is due to the fact that an summation successful enslaved output leads to declining request for existing lower-yielding bonds and successful turn, the devaluation of these bonds.

As expected, this expanding enslaved output has resulted successful a 20% depreciation of semipermanent US bonds implicit the past six months. Meanwhile, determination has been a important 53% diminution successful the worth of these concern assets since March 2020.

Bitcoin Records Less Volatility Than US Treasuries

Furthermore, IntoTheBlock highlighted that Bitcoin’s volatility is presently little than that of these US semipermanent bonds, indicating it offers a higher level of stableness to accepted investors looking astatine the worth of their investment.

Finally, the probe steadfast pointed retired Bitcoin’s singular show during this enslaved marketplace crash, likening it to the asset’s affirmative terms question during the bid of US slope collapses earlier successful 2023.

The blockchain probe steadfast noted the crypto marketplace person tallies with golden with a 7% summation already successful October and is receiving much designation arsenic a favorable alternate concern plus by respective Wall Street fiscal experts.

Considering each the factors listed above, IntoTheBlock states that determination are increasing signs that Bitcoin is becoming a harmless haven for accepted investors and could mostly payment from a “Flight to Quality” movement, particularly with the potential motorboat of spot Bitcoin ETF.

At the clip of writing, Bitcoin is trading astatine $29,667 with a 0.27% nonaccomplishment successful the past day. In tandem, the token’s regular trading measurement is down by 18.70% and is presently valued astatine $15.86 billion.

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