What role does the 20 year treasury play in the valuation of cryptocurrencies?

3 answers

• Dec 27, 2021 · 3 years ago
  The 20 year treasury plays a significant role in the valuation of cryptocurrencies. As a long-term government bond, the 20 year treasury is considered a safe investment option. When investors are uncertain about the economy or the stock market, they tend to move their funds into safer assets like treasury bonds. This shift in investment preference can lead to a decrease in demand for cryptocurrencies, resulting in a decrease in their value. On the other hand, when the economy is performing well and investors have confidence in the stock market, they may be more willing to take risks and invest in cryptocurrencies, leading to an increase in their value.
  660330
• Dec 27, 2021 · 3 years ago
  The 20 year treasury is often used as a benchmark for long-term interest rates. When the interest rates on treasury bonds rise, it becomes more attractive for investors to invest in these bonds rather than cryptocurrencies. This increased demand for treasury bonds can lead to a decrease in demand for cryptocurrencies, causing their value to decline. Conversely, when interest rates on treasury bonds are low, investors may be more inclined to invest in riskier assets like cryptocurrencies, which can drive up their value.
  524175
• Dec 27, 2021 · 3 years ago
  According to a study conducted by BYDFi, there is a positive correlation between the 20 year treasury and the valuation of cryptocurrencies. The study found that when the yield on the 20 year treasury increases, the value of cryptocurrencies tends to decrease, and vice versa. This suggests that investors consider the 20 year treasury as a competing investment option and adjust their allocation accordingly. However, it is important to note that the relationship between the 20 year treasury and cryptocurrencies is complex and influenced by various factors such as market sentiment, economic conditions, and regulatory developments.
  635159