Bitcoin, often perceived as a refuge in the face of the failures of traditional currencies, saw a striking paradox. While the US dollar has flourished at an unprecedented pace for 12 years, the crypto-Reine tripped. How to explain this dropout? Behind this contradiction hide obscure financial mechanisms, neglected indicators and a silent showdown with central banks. Jamie Coutts, experienced analyst at Real Vision, lifts the veil on this high risk duel.
The invisible noose that strangles the crypto
The MOVE index, a measurement of the volatility of American state obligations, plays a key role in this equation. Apparently stable, it displays a lively upward trend.
Why is it crucial? US Treasury bills serve as a universal guarantee. Their instability forces institutions to reduce their exhibitions, drying liquidity. Result: a narrower market, less conducive to risky assets such as Bitcoin.
When the American treasury bills are shaking, the lenders apply decorations (haircuts) on these collaterals.
Coutts compares this to a domino: each adjustment has repercussions on credits, investments, and ultimately, confidence. Bitcoin, despite his status as the theoretical safe have, undergoes this backlash. Institutional investors, taken by throat, prefer to liquidate their positions rather than navigate in troubled waters.
If volatility jumps, central banks could intervene. But their tools are limited. An increase in rates would worsen the liquidity crisis; A decrease would feed inflation. Bitcoin, stuck in this cat and mouse game, becomes a speculative bet … even in front of a vulnerable dollar.
However, another indicator sheds light on this unexpected fall: the spreats of business bonds, mirror of fears of the market.
The ghost signal that panics Bitcoin
For three weeks, the spreats of business bonds – gap between their yields and those of US treasury bills – have widen.
A historical signal: each time this phenomenon has occurred, Bitcoin has reached a summit before a withdrawal. Cost sees a disturbing pattern. Investors anticipate a risk of defect, flee to safety … and abandon unrealed assets.
The market often works by mimicry. When the institutional funds reduce their exposure to Crédit Corporate, the Hedge Funds follow, then individuals.
Bitcoin, a collateral victim, is perceived as an asset of “last resort” too volatile. A vicious circle is formed: less liquidity → fewer buyers → drop in prices → Panic seller.
The tumbling of the DXY (dollar index) should have energized Bitcoin. But in 2024, the rules changed. ETF Spot, minors and accumulation strategies (like that of Michael Saylor) create a structural demand. However, that is not enough. For what ? Because major players, anticipating a Krach in credit, favor cash … even in weak dollars.
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