Bitcoin is at $10,240 in early trading on Monday, up 6.4% from its Friday closing price of $9,625, after news broke that US government is close to approving another $1trn stimulus package, pushing the US dollar further down from its already depressed levels.
Gold futures also reacted by topping its all-time high of $1,920 on Monday, as investors moved their money to the yellow metal amid concerns of real negative interest rates in the US.
The US 10-year Treasury bond yield continues to trade below the 0.600% mark at 0.589%, a level only seen in early April at the peak of the pandemic. This low yield would end up producing investors a negative yield of around -0.9% if the inflation rate in America hits 1.5% by the end of 2020, as some experts forecast.
Bitcoin is apparently being seen as a safe-haven amid a deteriorating macroeconomic environment in the US, with investors flocking to the crypto asset to protect their money as another massive injection of liquidity threatens to push the dollar and bond yields downwards.
“What we have unfolding is potentially re-accumulation by big players, joined by smaller traders in an attempt to push BTC higher past $10,000 and more past $10.500, which is the big resistance level, where BTC last put in a high”, said Vijay Ayyar (pictured), head of business development at cryptocurrency exchange Luno, to CNBC on Monday.
Meanwhile, another element behind Bitcoin’s rally is the so-called ‘halving’ event, which took place in early May. This major event would reportedly halve the reward obtained by Bitcoin miners for processing transactions made by using the cryptocurrency’s blockchain, reducing the supply and pushing prices up as a result.
This recent jump in the value of Bitcoin (BTC) would result in a 42% year-to-date gain for the king of the crypto market, while bullish traders expect this rally to head towards $15,000, especially if the price of BTC manages to cross its $10,500 resistance level.