Takeaways from the conference:
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The demand for bitcoin is not driven solely by the net flows of BTC ETFs but rather investors’ concerns about macroeconomic issues.
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Bitcoin has become a safer haven as a result of the global volatility in bond markets. Rising inflation and interest rates are affecting investors’ decision to invest.
Analysts say Bitcoin is a popular investment among investors (BTC) Its role as a hedge to geopolitical or financial instabilities is becoming more important.
The aforementioned is a recent X postAdam, an independent analyst, noted that institutional investors’ purchases of spot BTC ETFs are not the main driver behind Bitcoin’s rise. Instead, it is the macroeconomic changes sparked off by inflationary pressures, volatility in the bond markets, and uncertainty caused by policies such as US President Donald Trump’s trade war.
Adam pointed out that Bitcoin’s price has risen by over 50% in the last quarter, coinciding to new tariffs. The performance of Bitcoin has strengthened the perception that it is a safe haven in times of economic and geopolitical uncertainty. Capital Flows, for example, argues that macroeconomic factors are more important than ETF flow in explaining the bull market.
Related: Bitcoin eyes ‘healthy pause’ around $106K before price picks up steam
Macro tailwinds impact Bitcoin demand
Capital Flows, Global macro researcher pointed out It is clear that the current BTC rally mirrors a dramatic increase in credit growth and an alteration in bond markets dynamics. Central banks like the European Central Bank have begun to reduce rates despite rising prices in certain segments, such as eurozone services. Markets are interpreting the ECB policy differently, even though it may be a reflection of concerns about a broader softening in economic conditions.
In Europe, for example, interest rate swaps on 30-year bonds have increased, indicating higher inflation and nominal growth expectations. Cointelegraph reported that the US long-term Treasury yields have also surged—30-year rates touched 5.15% in May, while the 10-year rate stood at 4.48%. The US long-term Treasury yields have also risen. In May, the 30-year rate reached 5.15% while the 10-year rate was at 4.48%. “bear steepening” When the yield curve is rising, it usually means that market participants are pricing in a stronger economic growth.
Stress on the bond markets is also a growing concern in Japan. In recent weeks, the 30-year bond yield hit 3.185% amid worries about Japan’s high ratio of debt to GDP. With the US’s debt outlook, and a continued fiscal expansion in the US, investors have begun to question the viability of sovereign debt over the long term as a store of wealth.
Bitcoin is becoming more popular as an asset that does not have a sovereign status and has a deflationary effect. The US is experiencing easy financial conditions captured by the National Financial Conditions IndexBitcoin is a beneficiary of this risk-taking. The rising debt levels, and the possibility of a new Federal Reserve expansion in the balance sheet are two more reasons to support crypto assets.
These factors highlight a larger macro-narrative: Bitcoin has emerged as a hedge, not just against currency depreciation and inflation but also against the instability of sovereign debt markets. The projected growth of the global economy, combined with this trend, has led to a broader macro narrative. $420 billion in investment inflowsThe current cycle may see capital continue to flow into BTC.
Related: Bitcoin bull market ‘great validator’ comes as James Wynn loses $100M
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Source: cointelegraph.com
