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Goldman's Bullish Stance on 'Real Bond Yield' Spells Bad News for Crypto
Real yields turned positive early early this year, removing the punch bowl that lubricated the party in risky assets, including cryptocurrencies.
Updated May 11, 2023, 4:39 p.m. Published Sep 19, 2022, 12:33 p.m.
The U.S. inflation-indexed bond yield has surged by 100 basis points (bps) since early August, causing renewed jitters in risky assets, including cryptocurrencies. And to the dismay of bulls, the so-called real yield is likely to rise even further in the coming months.
- On Friday, Goldman Sachs (GS) said 10-year U.S. Treasury inflation-protected securities (TIPS), which are adjusted periodically to compensate for increases in the consumer price index, could rise to 1.25% by the year end and eventually peak somewhere at between 1.25% and 1.5%.
- The real yield stood at 1.02% at press time, the highest since November 2018, according to data from charting platform TradingView.
- Bitcoin has historically moved in the opposite direction to the real yield.
- The 90-day correlation coefficient between the two reached a record -0.95 at the end of June.
- The negative correlation weakened somewhat to -0.65 in recent weeks as the Merge overshadowed macroeconomic factors.
- With the Ethereum blockchain's long-pending software upgrade out of the way, however, bitcoin's and the broader crypto market's negative correlation with real yields could strengthen again.
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Read: As Ether, Bitcoin Wilt, Trading Firms Blame Lack of Bullish Catalyst for Market Swoon
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Solana CME Futures Fell Short of BTC and ETH Debuts, but There's a Catch
When adjusted for asset market capitalization SOL's relative futures volume looks better, K33 Research noted.
Lo que debes saber:
- Solana's SOL futures began trading on the Chicago Mercantile Exchange (CME) on Monday, with a notional daily volume of $12.3 million and $7.8 million in open interest, significantly lower than the debuts of bitcoin (BTC) and ether (ETH) futures.
- Despite the seemingly lackluster debut, when adjusted to market value, SOL's first-day figures are more in line with BTC's and ETH's, according to K33 Research.
- Despite the bearish market conditions, the launch of CME SOL futures offers new ways for institutions to manage their exposure to the token, said Joshua Lim of FalconX.
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