Bitcoin (BTC) Pumps and Benefits from Macroeconomic Trends

In less than a week, the price curve of Bitcoin (BTC) has once again gone through amazing ups and downs. Last week, when the voluntary closure of crypto-friendly Silvergate Bank hinted at serious problems for the U.S. banking landscape, Bitcoin briefly even fell below the psychologically important mark of $20,000 and the outlook looked less than optimistic.

However, since Monday, the price per BTC has been climbing briskly again and even temporarily surpassed $26,000 yesterday (Tuesday). The high volatility paired with Bitcoin’s current positive trend is already tempting some to again attribute BTC to decoupling from stock markets, referred to as “decoupling” in the crypto sector.

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Bitcoin maxis love such a scenario because they see it as an argument to consider investments in BTC more promising than in stocks

However, on closer analysis, this thesis probably does not hold up. The recent price capriciousness of Bitcoin could also be observed in the stock markets, at least in their direction of impact. The important U.S. indices S&P 500 and NASDAQ also showed a down and up parallel to the Bitcoin price curve.

Also, if you take the current Bitcoin price of just under $25,000 at midday today (Wednesday) as a benchmark, it shows levels last reached in the summer of 2022. This is comparable to S&P 500 and NASDAQ, even though the indexes had still entered an intermediate high.

Thus, the search for a good mood among investors leads back to the general economic situation and fiscal policy. Here it was positively received that the U.S. government took the pressure out of the system with the forced closure of Silicon Valley Bank and Signature Bank, which in the short term also cast doubt on the stability of Stablecoin USD Coin (USDC).

Add to that the recent inflation figures from the U.S., which continue to be at 6 percent year over year, well above the central bank’s fiscal target. But on the other hand, because inflation has stopped rising and seems to be slowly cooling, the Fed could pause further rate hikes. This would suit Bitcoin, as when interest rates are low, BTC is more interesting as an asset class than when good interest rates can be achieved even with conservative strategies.

Conclusion: Bitcoin pulls altcoins along on the upswing

A look at the charts not only shows a weekly gain of a good 12 percent for Bitcoin, but popular altcoins from Ethereum (ETH) to Polkadot (DOT) pumped similarly. Thus, BTC has once again proven its position as the lead currency for the crypto market. In this position, Bitcoin tends to exaggerate macroeconomic trends, but BTC cannot detach itself from what financial policy and the economic situation dictate.

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(Featured image by Michael Förtsch via Unsplash)

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First published in BLOCK-BUILDERS.DE, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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