Connect with us


Bitcoin (BTC) Pumps and Benefits from Macroeconomic Trends

Bitcoin (BTC) has rallied so far this week, even trading above $26,000 at times, the highest since June 2022. Financial policy developments are mentioned as a background. 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.



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.

Read more about Bitcoin and find the latest business news from around the world with the Born2Invest mobile app.

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.


(Featured image by Michael Förtsch via Unsplash)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

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.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us

Valerie Harrison is a mom of two who likes reporting about the world of finance. She learned about the value of investing at a young age upon taking over her family's textile business when she was just a teenager. Valerie's passion for writing can be traced back to working with an editorial team at her corporate job, where she spent significant time working on market analysis and stock market predictions. Her portfolio includes real estate funds, government bonds, and equities in emerging markets such as cannabis, artificial intelligence, and cryptocurrencies.