Key Points
- Bitcoin has decoupled from U.S. bond yields, suggesting investors increasingly view it as a store of value.
- Bitcoin liquidity inflow currently places it ahead of the S&P 500 and gold, indicating a possible shift in investor preferences.
Bitcoin is increasingly being viewed as a store of value, as it decouples from U.S. bond yields.
The liquidity inflow into Bitcoin currently places it ahead of the S&P 500 and gold. This suggests that investors might be changing their preferences.
Bitcoin’s Position in the Market
Bitcoin has maintained its position as a top market asset, especially after trading above $100,000. At the time of writing, it ranked as the 7th most valuable asset globally, with a market capitalization of $2.09 trillion. This places it ahead of Facebook and silver.
Recent analysis suggests that Bitcoin is attracting significant liquidity from investors. This appears to be a result of capital rotation from other markets.
Decoupling from U.S. Bond Yields
A report by CryptoQuant indicates an ongoing decoupling between Bitcoin’s price and U.S. bond yields. Historically, Bitcoin tends to decline when bond yields rise, and vice versa. However, current data shows that the asset continues to rally alongside the 5-year, 10-year, and 30-year U.S. Treasury yields.
This unusual trend in Bitcoin’s correlation with macroeconomic indicators implies that investors may now view it as a store of value. This offers protection during periods of quantitative tightening.
Bitcoin has outperformed gold and the S&P 500 in YTD returns. According to Artemis data, Bitcoin has delivered a 58.8% return, outpacing gold’s 46.7% and the S&P 500’s 11.5%. This strong performance indicates that institutional investor sentiment is increasingly in favor of the digital asset.
Data from CoinGlass supports this view. Bitcoin spot ETFs ended the past week on a positive note, recording $1.37 billion in inflows, with an average daily purchase of $274 million.
This trend suggests that investors will continue accumulating the asset. Bitcoin’s Exchange Reserves continue to decline, with only 2.49 million BTC available across trading platforms at the time of analysis.
A sustained drop in reserves typically indicates a tightening supply, a key metric that can significantly drive up both demand and price.
One important factor influencing this trend is the premium index for U.S. and Korean investors—two groups that have notably impacted the asset price movements.
At the time of writing, both the Coinbase Premium Index and the Korean Premium Index remain in positive territory, indicating strong buying interest. If these premiums continue to rise, it would suggest increased demand from these investor groups.
Notably, the Coinbase Premium Index serves as a critical metric. A significant rise at the start of the week often indicates fresh capital flowing in from other asset classes, contributing to Bitcoin’s upward momentum.
