Completely agree, however probabilistically even if a small amount of the extensive cash-pile sitting in bonds decides to move out on the risk curve or hedge their lack of yield into $BTC then we will get some great moves.
Secondarily, as described, if bonds fall further theres a good chance that QE will restart under a different guise/name (when inflation has peaked) - therefore leading to moves in risk assets without the proposed scenario above.
Is it really a risk on asset though? What if people start accepting it (or any other crypto currency) for payments and learn that the supply is more stable and the velocity higher?
By definition it is a risk asset as it is a liquid marketplace. If people start accepting crypto as payment and it reaches exit velocity with adoption, then we may see some sort of attitudinal transition out of the risk criteria - however, for now it is firmly stuck as a risk on asset.
Those are the two markets that are grey in my opinion. Bonds are issued by governments and therefore it depends upon the issuing government whether they are risk assets or not. Forex is also hard to categorise as it is more about speculation relative to other currencies than the intrinsic value of each individual currency - again there is ties with the government backing the currency etc. The ultimate risk-off market for me is property (if done correctly) as it is providing active utility, cashflow and benefits from gradual capital appreciation (if in a good area).
Ultimately the definition of risk-off and risk-on I have found to vary from investor to investor depending on appetite and outlook.
It's a stretch to assume Japanese investors will want to risk on into BTC. Human nature is to risk off. Only the few can make bets.
Completely agree, however probabilistically even if a small amount of the extensive cash-pile sitting in bonds decides to move out on the risk curve or hedge their lack of yield into $BTC then we will get some great moves.
Secondarily, as described, if bonds fall further theres a good chance that QE will restart under a different guise/name (when inflation has peaked) - therefore leading to moves in risk assets without the proposed scenario above.
Is it really a risk on asset though? What if people start accepting it (or any other crypto currency) for payments and learn that the supply is more stable and the velocity higher?
By definition it is a risk asset as it is a liquid marketplace. If people start accepting crypto as payment and it reaches exit velocity with adoption, then we may see some sort of attitudinal transition out of the risk criteria - however, for now it is firmly stuck as a risk on asset.
So by your definition tresury bonds and forex markets (being liquid) are a risk asset as well?
Those are the two markets that are grey in my opinion. Bonds are issued by governments and therefore it depends upon the issuing government whether they are risk assets or not. Forex is also hard to categorise as it is more about speculation relative to other currencies than the intrinsic value of each individual currency - again there is ties with the government backing the currency etc. The ultimate risk-off market for me is property (if done correctly) as it is providing active utility, cashflow and benefits from gradual capital appreciation (if in a good area).
Ultimately the definition of risk-off and risk-on I have found to vary from investor to investor depending on appetite and outlook.