Impact of T-bills Issuance on the Bitcoin Market
Keyrock analysts examine how the issuance of U.S. T-bills affects Bitcoin. Explore the correlation and projected impacts.
Table of content
Impact of Treasury Bonds on the Bitcoin Market
Analysts at Keyrock highlight the crucial role that the issuance of U.S. Treasury bonds (T-bills) plays in the dynamics of Bitcoin exchange rates. According to their data, a change in global liquidity by just 1% can cause a 7.6% change in the Bitcoin exchange rate in the next quarter.
Statistical Correlation
Since 2021, the correlation between T-bills issuance and Bitcoin price has reached 80%. This indicator of U.S. government bond issuance serves as a leading indicator with an eight-month time lag. According to Amir Hadjian, an analyst at Keyrock, funding expenditures through bills affects the real economy, which in turn is reflected in risky assets like Bitcoin.
Liquidity Factors and Their Impact
The growth in the net issuance of Treasury bonds historically acts as a leading indicator for Bitcoin dynamics. Institutional capital and spot ETFs have reduced Bitcoin’s sensitivity to liquidity changes by 23%. Consequently, the impact of macroeconomic factors on the asset has become less pronounced.
Perspectives on U.S. Public Debt Payments
According to Keyrock’s forecast, the U.S. will need to refinance a significant portion of its public debt, which exceeds $38 trillion, in the coming years. New loans will be more expensive due to changes in interest rates, likely leading to an increase in T-bills issuance.
Issuance Forecasts
Keyrock forecasts that by 2028, the annual volume of Treasury bill issuance may reach $600 billion to $800 billion. This will be a significant fiscal stimulus for the economy, which may continue to drive Bitcoin growth.
Conclusion
Based on Keyrock’s report, it can be concluded that the issuance of U.S. Treasury bonds has a significant impact on the Bitcoin exchange rate, especially in the long run.
- Strengths: High correlation allows for trend prediction.
- Risks: Increasing rates may complicate financing.
- Opportunities: Attraction of institutional capital.
- Threats: Instability in macroeconomic conditions may change dynamics.
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