Bitcoin is facing a prolonged interest-rate backdrop as the Bank of England continues unwinding a £368 billion portfolio, according to CryptoSlate. Gilt yields recently fell after the Bank paused active auctions, easing immediate pressure in the government bond market. However, the Bank’s broader portfolio reduction remains in progress, leaving a longer-term rates risk that could persist over an eight-year period. The developments place the Bank of England’s balance-sheet unwind at the centre of the market outlook for Bitcoin and other risk assets. While the pause in active auctions has affected near-term gilt trading, the full unwind is expected to remain a slow-moving factor for rates. CryptoSlate said the continuing process represents an extended test for Bitcoin’s sensitivity to changes in the interest-rate environment.
