- The smaller than expected supply of US government bonds for the first quarter of 2024 and the Fed’s accommodative policy contributed to the increase.
- Market participants were optimistic about Bitcoin at the time of writing.
The crypto market was buzzing with excitement like Bitcoin [BTC] broke through the $35,000 level after more than 17 months. Most market observers and analysts attributed the break to optimism over the adoption of spot ETFs.
Is your portfolio green? Check out the BTC profit calculator
Macro Factors Boosted Bitcoin?
However, contrary to popular perception, a well-known crypto asset trading company is operating QCP Capital linked the recent rally to macroeconomic factors.
The Singapore-based company said the lower-than-expected US Treasury supply estimate for the first quarter of 2024 pushed bond markets lower while favoring risky asset classes.
The yield on the 10-year US Treasury bond has indeed risen dropped during the week. Typically, higher returns on risk-free government bonds hurt demand for speculative assets such as stocks and cryptos.
Furthermore, the US Federal Reserve’s recent decision not to raise interest rates put significant upward pressure on stocks and cryptos, according to QCP Capital. Historically, the crypto market has been known to respond positively to such relaxed monetary policy.
However, QCP Capital warned that broader sentiment was bullish and it may be too early to celebrate.
“Whether this marks the start of a new global uptrend in equities and bonds remains to be seen, as the macro picture remains essentially unchanged, barring a correction in overly bearish sentiment on bonds.”
Bitcoin beats other assets in terms of risk-adjusted returns
Regardless of the reasons for the rise, Bitcoin established itself as one of the most attractive investment vehicles. AMB Crypto took a closer look at the Sortino ratios of a wide range of asset classes from IntoTheBlock.
It was discovered that Bitcoin had the highest value at 1.68, outperforming other stock and dollar indices.
For the uninitiated, the Sortino ratio is similar the performance of the asset relative to its downside risk. A higher ratio meant that investors were more likely to park their money with the king coin.
Source: IntoTheBlock
Read BTC price forecast for 2023-2024
More profits on the way?
At the time of writing, BTC was exchanging hands at $34,262, with an impressive 24% gain in the past month, according to CoinMarketCap.
Market sentiment has been trending towards greed, according to the latest reading of the Bitcoin Fear and Greed Index. This implied that traders were in the mood to buy more and the market was trending upward.
Bitcoin Fear and Greed Index is 65 – Greed
Current price: $34,235 pic.twitter.com/XdAAmEA6tg— Bitcoin Fear and Greed Index (@BitcoinFear) November 3, 2023