Crypto market continues to show weakness during the newyork session and the reason is simple.
Bonds market continues to rip higher
High bond yields generally mean two things:
1- Risk-free return becomes more attractive
If you can earn a high % relatively risk-free, investors may have less incentive to take on additional risk in assets like stocks and crypto.
2- Borrowing costs go higher
Higher yields can translate into higher financing costs for companies, which can put pressure on future profits and valuations.
Both of these factors can typically put downward pressure on risk assets.
If bond yields continue pushing higher, it can become an important headwind for risk assets.
And if yields keep moving higher, the Fed may have to keep rates higher for longer or potentially consider another hike.
The market is basically reacting to all of these factors together.
Bonds market continues to rip higher
High bond yields generally mean two things:
1- Risk-free return becomes more attractive
If you can earn a high % relatively risk-free, investors may have less incentive to take on additional risk in assets like stocks and crypto.
2- Borrowing costs go higher
Higher yields can translate into higher financing costs for companies, which can put pressure on future profits and valuations.
Both of these factors can typically put downward pressure on risk assets.
If bond yields continue pushing higher, it can become an important headwind for risk assets.
And if yields keep moving higher, the Fed may have to keep rates higher for longer or potentially consider another hike.
The market is basically reacting to all of these factors together.
