Hedge Fund Manager Says Sell-off in US Treasury Bonds a Threat to ‘High-Flying Assets’ Like BTC

by Gordon James

Hedge fund manager Bob Prince warned that the recent selloff in the US government bond market could accelerate and put highly liquid assets such as cryptocurrencies and blank cheque companies at risk. Prince, who co-leads Bridgewater Associates, attributes this emerging decline in the $21 trillion Treasury market to an improving economy and increased inflationary pressures.

Hedge Fund Manager Says Sell-off in US Treasury Bonds a Threat to ‘High-Flying Assets’ Like BTC

Both factors, Prince said, could lead the Federal Reserve to consider withdrawing its stimulus measures. Nevertheless, Federal Reserve officials see the Treasury as a healthy response to the burgeoning U.S. economic recovery, a report explained.

However, Prince argues that this rise in cryptocurrencies such as bitcoin is a manifestation of the environment created by the Federal Reserve’s generous monetary policy and stimulus measures by the US Congress.

At the same time, according to the report, inflation expectations in the US have risen this year, which has affected government bond prices and pushed up yields. This has already affected fast-growing technology companies such as Netflix, Amazon and Tesla, whose high valuations were supported by low interest rates.

Hedge Fund Manager Says Sell-off in US Treasury Bonds a Threat to ‘High-Flying Assets’ Like BTC

At the same time, the same report explains that foreign investors, one of the largest buyers of Treasury securities after the Fed, have already shown less appetite for U.S. Treasury securities as their losses mount.

10-year Treasury yields have recently risen above 1.6%, up from 0.9% at the end of last year. This led to the worst quarter for cash investors in more than four years, Ice Data Services said.

Do you agree with Prince’s classification of cryptocurrencies as highly liquid assets? You can share your thoughts below in the comments section.

Photo credit: Shutterstock, Pixabay, Wiki Commons, FT, Bloomberg, ICE Data Services,

Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of a product, service or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.

Related Posts