Despite Bitcoin (BTC) slipping back beneath $50,000, more and more investors are likely to motion their capital into Bitcoin and gold markets in the second one-half of 2022 (H2), asserted Mike McGlone, senior commodity strategist at Bloomberg Intelligence, on Aug. 23.

The financial analyst cited the consistently lower yields offered by the xxx-twelvemonth U.S. Treasury notation to explicate his upside prediction. He noted that if its charge per unit of return persists below two%, it could enhance the price discovery stage for Bitcoin while posing a competitive advantage for traditional safe-haven avails similar gold.

"Unlike the stock marketplace, the old analog store-of-value and new digital version share substantial corrections," McGlone added, referring to the trivial reversion in the S&P 500 alphabetize in the first half of 2022 (H1), which increases its potential to correct lower in H2.

In turn, it arranges new capital for other markets with extreme upside potential, such as Bitcoin.

Bitcoin, gold and U.S. bonds index vs. S&P 500 total return alphabetize. Source: Bloomberg Intelligence

"The South&P 500 up or downwardly ten% in 2H offers a simple binomial model," wrote the Bloomberg annotator in a enquiry note in July.

"If upward, it would be about 3x the annual norm since 1928 and buoy the Bloomberg Milky way Crypto Index higher up the 1H gain of nigh 80%. If downwards, bail yields would probable follow and Bitcoin may be a main beneficiary."

Bitcoin to achieve a new tape high?

The Federal Reserve's unprecedented interference in the bail market place after the March 2022 market place crash drove rates downward. Institutional investors that ideally look for 5% annual yields from the bond market to curb inflationary pressures now grappled with short-term bonds, some of them offering yields below zero.

Meanwhile, yields on the longer-dated Treasury also fell to record lows. That forced investors to look for alternatives in the riskiest parts of the financial markets — higher-returning, non-debt investments like Bitcoin.

"It was the breach of [the 2%] threshold in 2022 that preceded the risk-off swoon and laid the foundation for Bitcoin's move toward new highs this year," the Bloomberg enquiry noted.

30-year U.Southward. Treasury yield vs. Bitcoin price. Source: TradingView

Tapering and Jackson Hole

McGlone's statements on bonds and Bitcoin correlation come up every bit Jerome Powell, chairman of Federal Reserve, prepares to deliver a speech at the Jackson Hole summit this calendar week — typically one of the most influential economic events.

The Fed's efforts to reduce its $120 billion per month bond-buying policy is expected to be a ascendant theme during the (virtual) Jackson Pigsty meeting. Investors will lookout man Powell's words for any clues on how and when the U.S. central depository financial institution will brainstorm its tapering plan.

In their July 27–28 coming together, Fed officials agreed to start unwinding their bond-ownership policy over a sanguine outlook for economical growth and the jobs market.

Nonetheless, the 30-year Treasury yield remained lower afterwards the news, with reports surfacing that investors were still expecting economic downturns attributable to the spread of the COVID-19 Delta variant.

"Many clients accept not specially understood how rates markets have moved, and that has brought in a degree of caution you wouldn't commonly see," Guneet Dhingra, head of U.Due south. interest rate strategy at Morgan Stanley, told the Fiscal Times.

Related: Bitcoin bullish cross on weekly chart paints $225K BTC price target if history repeats

After the Fed outlook on Aug. 18, Bitcoin'south price rose by more than fourteen% to accomplish a iii-month loftier of $50,784.

Bitcoin daily cost nautical chart. Source: TradingView

The BTC/USD exchange charge per unit slipped below $l,000 on Aug. 23 on profit-taking sentiment. At its lowest, the pair's bid was $49,369.

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