For Patient Accumulators, Economic Liquidity Issues Present Massive Bitcoin Opportunity Today

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The below is from a recent edition of the Deep Dive, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

The meltdown in equity and credit markets is occurring while the yield curve (10-year U.S. Treasury yield minus two-year U.S. Treasury yield) is flattening in a dramatic way:

The yield curve is of great importance in the financial system due to the way that lending is conducted. Most creditors borrow short to lend long (i.e., take on short-dated liabilities and acquire long-dated assets), so when the yield curve inverts, it means that creditors are more incentivized to hold short-dated government paper than they are to lend out for duration. The implications of short-dated yields being higher than long-dated means it is also less risky to hold cash than it is to invest in risk assets (even with negative real yields) that sell off with weak economic activity.