Bitcoin is increasingly moving in the opposite direction of the yield on the U.S. 10-year inflation-indexed security. reports godbole17
to fight rampant inflation. While the leading cryptocurrency has dropped nearly 57%, the tech-heavy Nasdaq index and gold are nursing a 27% and 5.2% loss, respectively.
The record negative correlation means the possibility of bitcoin plunging below the June low of $17,601 cannot be ruled out should the real yield continue to rise. And to the dismay of bulls cheering the bottom signals on , the path of least resistance for the real yield appears to be on the higher side. That's because, inflation is showing no signs of slowing down and the Fed is unlikely to apply brakes to policy tightening anytime soon.
The Fed is likely to raise borrowing costs by 75 basis points later this month, bringing the benchmark interest rate to a range of 2.25% to 2.5% from 0% to 0.25% at the start of 2022. Further, the Fed funds futures have priced a 50 basis point hike in September and 25 basis points hikes at the November and December meetings.June's consumer price index figure. The data is likely to show the cost of living rose 1.1% month-on-month, bringing the annualized figure to a new four-decade high of 8.
Therefore, a weaker-than-expected core CPI figure might pull down the real yield, lifting bitcoin and other risk assets. Bitcoin was last trading near $19,650, representing a 1% drop on the day, according to
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