Report: Bitcoin is the best asset to deal with the consequences of rising bank interest rates in the United States
The Babel Finance Institute, which has extensive operations in various sectors of the digital currency industry, recently published a report showing that Bitcoin is one of the best assets available to withstand the economic pressures of a sharp rise in US bank interest rates. .
To Report The authors of this report, Crypto News, are two analysts at the Babel Finance Institute, Robbie Liu and Yuanming Qiu, who examined the reaction of financial markets to the previous three phases of rising bank interest rates this year. It is worth mentioning that the US Federal Reserve had raised interest rates earlier this year, on May 4, March 16, and January 26, 1400.
In recent US interest rate hikes, Bitcoin has been more able to adjust to the economic effects of the move than any other digital asset, including Atrium, while Bitcoin is highly correlated with the US stock market in terms of price. It also has an “S & P500” stock index.
Babel Finance wrote in this report:
The performance of bitcoin in periods of rising bank interest rates shows that this digital currency as a whole is more able to withstand the economic consequences of these changes in the monetary system than assets such as stocks and atriums.
Explaining why Bitcoin is able to withstand these economic changes, Babylon Finance experts point out that “a significant portion of Bitcoin holders have always relied on the capabilities of this digital currency as a tool to store value and counter inflation.”
Therefore, even in periods when many risky assets, [مانند آلت کوینها و سهام] Faced with a downturn, a majority of bitcoin holders still prefer to keep their capital.
The important point that can be seen in this study is that bitcoin is facing the economic consequences of the growth of bank interest rates in the United States, while the price correlation of this digital currency with the US stock market is at its highest level since May 2020. ) AD.
According to the Babel Finance report, the 30-day correlation between Bitcoin and the S & P500 index reached 80% on May 6, 2022 (May 16), which is the highest level since July 2017 (July 2017).
In predicting the future price, however, Babylon finance experts are still unsure whether Bitcoin has reached the end of its downtrend.
The report states:
Some analysts are looking for signs to confirm that Bitcoin is reaching the price floor; But in this report, we are not going to answer the question of whether entering the bitcoin market is the right decision in the current situation or not.
Instead of trying to predict the Bitcoin price floor, Babel Finance has tried to make it clear in its report that even with falling prices and strong correlations with the stock market, Bitcoin is not going to store its value in this downturn completely. Give up.
Babylon Finance analysts wrote in the final part of their report:
As we have seen in the past, the long-term outlook for Bitcoin is not going to be tarnished by another price drop; Because there are still people who believe in this digital currency.