Charles Schwab has put a number on what it would take for Bitcoin to hold its own against one of the most boring, reliable corners of the bond market. The answer: about $154,000 per coin.
The brokerage giant modeled Bitcoin’s price sensitivity to a US Senate bill tied to a $5 billion market, concluding that the cryptocurrency would need to reach approximately $154,000 to match the returns offered by 30-year Treasury Inflation-Protected Securities, which currently yield 2.98%.
The Schwab framework
TIPS are Treasury bonds that adjust their principal based on inflation. The 30-year variety currently yields 2.98%, which means investors are locking in a real return (above inflation) of just under 3% for three decades.
Schwab’s model essentially asks: at what price does holding Bitcoin deliver equivalent risk-adjusted value compared to parking money in TIPS? The answer they arrived at is $154,000.
