{"id":13395,"date":"2023-09-26T18:18:02","date_gmt":"2023-09-26T18:18:02","guid":{"rendered":"https:\/\/cryptoheretostay.com\/?p=13395"},"modified":"2023-09-26T18:18:03","modified_gmt":"2023-09-26T18:18:03","slug":"do-bitcoin-halvings-spark-btc-price-rallies-or-is-it-us-treasurys","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=13395","title":{"rendered":"Do Bitcoin halvings spark BTC price rallies, or is it US Treasurys?"},"content":{"rendered":"<script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script>\n<p>The relationship between Bitcoin\u2019s price and U.S. Treasury yields has long been considered a strong indicator due to historical data and the underlying rationale. <\/p>\n<h2>Bitcoin halvings vs. 10-year Treasury yields<\/h2>\n<p>In essence, when investors turn to government-issued bonds for safety, assets like Bitcoin (BTC), which are considered risk-on, tend to perform poorly.<\/p>\n<p>A noteworthy chart shared by TXMC on X (formerly known as Twitter) makes the argument that Bitcoin halvings have coincided with \u201crelative local lows\u201d in the 10-year Treasury yield. Despite the questionable use of the term \u201crelative,\u201d which doesn\u2019t precisely match a three-month low, it\u2019s still worth examining the macroeconomic trends surrounding past halvings.<\/p>\n<p lang=\"en\" dir=\"ltr\">#BTC halvings have coincidentally arrived at local lows in treasury yields each of the first 3 times. After these moments, risk assets rose broadly while growth expectations also improved.<\/p>\n<p>Thus a myopic Bitcoin narrative about supply shocks was born. But it was always macro. pic.twitter.com\/KGQ4TMeKWC<\/p>\n<p>\u2014  (@TXMCtrades) September 18, 2023<\/p>\n<p>First and foremost, it\u2019s important to emphasize that the author asserts that the correlation should not be taken as a \u201cdirect causal link between yields and BTC price.\u201d Furthermore, TMXC argues that over 92% of Bitcoin\u2019s supply has already been issued, suggesting that daily issuance is unlikely to be the factor \u201cpropping up the asset\u2019s price.\u201d<\/p>\n<h2>Could the 10-year yield chart be useful vs. Bitcoin?<\/h2>\n<p>First, it\u2019s essential to recognize that human perception is naturally inclined to spot correlations and trends, whether real or imaginary. <\/p>\n<p>For instance, during Bitcoin\u2019s first halving, the 10-year yield had been steadily rising for four months, making it challenging to label that date as a pivotal moment for the metric.<\/p>\n<p><em>U.S. government bonds 10-year yield, 2012. Source: TradingView<\/em><\/p>\n<p>One might give some benefit of the doubt since, in fact, leading up to Nov. 28, 2012, yields dipped below 1.60%, a level not seen in the previous three months. Essentially, after the first Bitcoin halving, fixed-income investors chose to reverse the trend by selling off Treasurys, thereby pushing yields higher.<\/p>\n<p>However, the most intriguing aspect emerges around Bitcoin\u2019s third halving in May 2020, in terms of the \u201crelative\u201d bottom of yields. Yields plunged below 0.8% approximately 45 days before the event and remained at that level for more than four months.<\/p>\n<p><em>U.S. government bonds 10-year yield, 2020. Source: TradingView<\/em><\/p>\n<p>It\u2019s challenging to argue that the 10-year yield hit its lowest point near the third halving, especially when Bitcoin\u2019s price only gained 20% in the ensuing four months. By comparison, the second halving in July 2016 was followed by a mere 10% gain over four months. <\/p>\n<p>Consequently, attempting to attribute Bitcoin\u2019s bull run to a specific event with an undefined end date lacks statistical merit.<\/p>\n<p><strong><em>Related:\u00a0Bitcoin price at risk? US Dollar Index confirms bullish \u2018golden cross\u2019<\/em><\/strong><\/p>\n<p>Therefore, even if one concedes the idea of \u201crelative\u201d local lows on the 10-year yield chart, there\u2019s no compelling evidence that Bitcoin\u2019s halving date directly impacted its price, at least in the subsequent four months. <\/p>\n<p>While these findings don\u2019t align with TMXC\u2019s hypothesis, they raise an interesting question about the macroeconomic factors at play during actual Bitcoin price rallies.<\/p>\n<h2>No Bitcoin rally is the same, regardless of the halving<\/h2>\n<p>Between Oct. 5, 2020 and Jan. 5, 2021, Bitcoin saw a remarkable 247% increase in its value. This rally occurred five months after the halving, prompting us to question what notable events surrounded that period. <\/p>\n<p>For instance, during that time, the Russell 2000 Small-Capitalization index outperformed S&amp;P 500 companies by a significant margin, with a 14.5% difference in performance.<\/p>\n<p><em>Russell 2000 small-cap index relative to the S&amp;P 500 (blue, right) vs. Bitcoin\/USD (orange, left). Source: TradingView<\/em><\/p>\n<p>This data suggests that investors were seeking higher-risk profiles, given that the median market capitalization of Russell 2000 companies stood at $1.25 billion, significantly lower than the S&amp;P 500&#8217;s $77.2 billion. <\/p>\n<p>Consequently, whatever drove this movement, it appears to have been associated with a momentum toward riskier assets rather than any trends in Treasury yields four months prior.<\/p>\n<p>In conclusion, charts can be misleading when analyzing extended time periods. Linking Bitcoin\u2019s rally to a solitary event lacks statistical rigor when the upswing generally initiates three or four months after the said event. <\/p>\n<p>This underscores the need for a more nuanced understanding of the cryptocurrency market, one that acknowledges the multifaceted factors influencing Bitcoin\u2019s price dynamics rather than relying solely on simplistic correlations or isolated data points.<\/p>\n<p class=\"post-content__disclaimer\">This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.\n<\/p>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/cointelegraph.com\/news\/bitcoin-halvings-btc-price-rallies-us-treasuries\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The relationship between Bitcoin\u2019s price and U.S. Treasury yields has long been considered a strong indicator due to historical data and the underlying rationale. Bitcoin halvings vs. 10-year Treasury yields In essence, when investors turn to government-issued bonds for safety, assets like Bitcoin (BTC), which are considered risk-on, tend to perform poorly. A noteworthy chart [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":13396,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[2],"tags":[],"class_list":["post-13395","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/13395","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13395"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/13395\/revisions"}],"predecessor-version":[{"id":13397,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/13395\/revisions\/13397"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/13396"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13395"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13395"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13395"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}