Fed Pivot Could Spark Last Domino for Bitcoin's Bull Market

Bitwise's André Dragosch has a rule of thumb for when rising 10-year yields become dangerous, which is when they spike by 80 basis points in just 20 trading days. This speed of the move matters more than the actual level of the yield. When yields rise too quickly, it can trigger rapid moves in the stock market, which often result in drops. If this trend continues and leads to a significant stock market correction, Dragosch believes that could force the Federal Reserve (Fed) to pivot its monetary policy.

This potential pivot is crucial for Bitcoin's price, as Dragosch thinks it will be the last domino needed before a genuine bull market begins. In simpler terms, a change in Fed policy can create a favorable environment for Bitcoin to rise. The expert attributes this to the cryptocurrency's nature of being an asset that benefits from a weaker US dollar and rising inflation.

In essence, Dragosch is saying that a rapid increase in 10-year yields could set off a chain reaction that ultimately leads to a significant price appreciation of Bitcoin. This is contingent on the Fed making a policy shift due to economic pressures triggered by the stock market correction.