Bitcoin (BTC) is coming off its best third quarter since 2017, but extending the rally may prove more difficult as Treasury yields above 5% offer investors an increasingly attractive alternative to risk assets, according to Delphi Digital.
In its latest weekly newsletter, Delphi highlighted Bitcoin’s 43% gain in the third quarter, followed by a third straight weekly advance last week. However, “the grind higher is happening against real resistance,” Delphi wrote, pointing to the Federal Reserve’s September rate hike and surging Treasury yields, which have reached multi-decade highs.
“When a government bond pays over 5% risk-free, every risky asset has to work harder to deserve the money,” Delphi wrote.
Bitcoin has so far managed to overcome the hurdle, helped in part by growing interest in the so-called debasement trade, or the view that persistent government borrowing and currency expansion will erode the dollar’s…
