Bloomberg "March Crypto Outlook": Bitcoin, Bonds and Crude Oil

Crude oil prices have crossed the $100 a barrel mark again after a lapse of 14 years, which seems to be a late-stage bullish positive for Bitcoin. As for the crude oil market, I am afraid it will replicate the trend of rising first and then falling in 2008, and will face the fate of collapse and recession.

The last global financial crisis prompted the birth of Bitcoin and North America’s transformation from a net importer to the number one energy exporter. And this Ukraine conflict may mark the end of the old world's dependence on oil, and the new world will embrace new technologies, especially cryptoassets.

At the same time, soaring commodity prices have also added fuel to a global recession. Not only that, but with the proliferation of cryptocurrencies, Bitcoin and Ethereum have had an inelastic supply and have not seen widespread adoption.



Bitcoin, Bonds, and Oil


Unsurprisingly, Bitcoin could benefit from the confrontation between bonds and crude oil. The Ukraine conflict this time may mark another step closer to Bitcoin’s move towards global digital collateral. And soaring energy prices have made people aware of the benefits of embracing technology, and of North America's ability to net oil exports. Combining supply, demand, adoption and human ingenuity, Bitcoin will regain the upper hand in the PK with oil in 2022.

The battle between Bitcoin and crude oil and bonds, despite the sharp surge in crude oil prices, but the long-term U.S. Treasury bond yields have failed to reach last year's highs, which means that further deflation may pull Bitcoin higher.

As of March, West Texas Intermediate crude has risen about 80% this year, while long-term bond yields have remained at around 2.2%, which we think bodes well for further declines. The conflict in Ukraine has also raised issues of safe investment transfers, as well as a bond versus bitcoin battle.

Soaring energy prices are a classic sign of a pre-recession, along with falling long-term bond yields. If the stock market continues to fall, Bitcoin will also face a lot of resistance, but the cryptocurrency is still going stronger, outperforming most stock indexes in 2022.