Bitcoin is ceasing to be a risky asset, says Bloomberg report
In a report, the US giant’s analyst firm detailed why bitcoin is moving away from other risky assets and also how it should react to rising interest rates in the US.
The latest analysis report from Bloomberg Intelligence, the analytics house of the New York giant, discussed key points observed during Bitcoin Week, which took place in Miami last month. According to the text, the world’s largest cryptocurrency is changing from a risky asset to a store of value. “What is happening to finance in the 21st century is impossible to contain,” the text reads.
At the beginning of the report, the company points to the growth of institutional involvement and the decline in the volatility levels of bitcoin (BTC) against other risky assets such as equities. The move resembles 2020, the text notes, when BTC saw its volatility decline, while increasing for other asset classes. Institutional adoption should also be a contributing factor to lower volatility, the document says.
Compared to the Nasdaq, in 2022, as of May 3, the stock index is down 20%, against 15% for BTC. The document further explains that despite sudden price changes, the volatility of the digital currency is in fact becoming lower.
With an eye on the rise in US interest rates, Bloomberg says that cryptocurrency may see a more expressive appreciation than shares, which, according to the text, have already stretched values. In addition, analyzing the data of digital wallets that carry BTC, it is possible to notice a “HODL movement”, citing the pun on the word “hold” used by crypto enthusiasts to refer to wallets that do not move their investments for long periods. of time, which may signal a smaller impact of the macroeconomic scenario than in stocks.
“We see great potential for bitcoin to continue doing what it has done for much of its existence – outperforming more traditional asset classes,” the report concludes.
Bloomberg Intelligence texts, which are quite relevant within the traditional financial market, have addressed bitcoin and digital assets before. In February, the analytics house stated that the $40,000 value at which BTC was trading at the time was “more of a floor than a ceiling”, putting $100,000 as a possible value for the asset.