New Bitcoin Narrative Targets Multitrillion Bond Market

Source: Adobe / Grispb

Large Australian mutual fund Pendulum group believes government bonds could become a “dead asset class” as they continue to lose their portfolios relevance and push investors to Bitcoin (BTC) due to the trillion dollar quantitative easing programs implemented by central banks.

“Ultimately, we believe that government bonds will become a dead asset class, so now we have to imagine what other asset classes will be like when bonds are no longer relevant to holding in a portfolio,” said Vimal Gor, Head of Bond. Income and defense strategies, told the Australian Financial Report. According to him, investors are looking for alternatives as bond yields “will stay low for a very long time” and “commodities and cryptocurrencies play a role in the answer”.

However, Gor said that Bitcoin is superior to gold as a social contract and wealth store because it is easier to trade, there are flat operating costs, and BTC has limited and diminishing supply.

“We’ve been positioning ourselves in gold for our clients for many years. Now we’re doing it with bitcoin,” he said, adding that many of their high net worth clients and wholesale investors are asking for BTC. In both cases, Gor said the fiat currency system will collapse but continue to develop.

In August 2020, the total size of global bond markets in terms of the nominal value of the USD equivalent was around USD 128.3 billion, according to estimates of the US dollar International Capital Markets Association.

New Bitcoin Narrative Targets Multi-trillion 102 Bond Market
Source: ICMA analysis using Bloomberg data (August 2020)

As reported last week, Rick Rieder, BlackRockGlobal Fixed Income’s chief investment officer said BTC was “much more functional” than gold and the most popular cryptocurrency could replace the yellow metal. At the end of last year, BlackRock had assets under management of $ 7.4 trillion.

Pendal Group is one of Australia’s largest investment managers with a fund volume under management of AUD 101.4 billion (USD 74 billion) at the end of 2019. The company is listed on the Australian Stock Exchange.

Su Zhu, CEO of the Crypto Investment Fund Three arrows capital, commented on the approach of the pendulum specification “If bonds began to separate from the global zero / negative yield government bond market to buy BTC, it would be a real capital flood.”

Meanwhile Michael Saylor, CEO and founder of the business intelligence company MicroStrategyexpects BTC and other cryptocurrencies to strengthen their position as “better store of value” for the $ 300 trillion that is currently “trapped in bonds, stocks, real estate, cash and gold and rapidly depreciating”.

At pixel time (10:38 UTC), BTC is trading at USD 18,726 and is up 3% in one day and 15% in a week. The price increased 44% in a month and 159% in a year.

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