Bitcoin – along with many other indicators Cryptocurrencies like EthereumAnd Cardano and Solana – they’ve gone up quite a bit in recent weeks and are trading at just over $24,000. Many analysts assumed $25,000 was right around the corner.
Bitcoin jumped a few thousand dollars
There seem to be several reasons behind the sudden rise in bitcoin, and one of the main reasons is that recession fears are starting to wane. There have been many concerns permeating the financial arena as of late 2008 and are likely to happen again given the current state of the economy. Inflation is at a 40-year high, and food and gas prices are soaring like never before. For these reasons, many were concerned that the economies of major countries such as the United States were on the verge of collapse.
In addition, the US has now gone through two consecutive periods of GDP contraction, which is usually a great indication that a recession is about to occur. However, many analysts believe that the Fed is likely to continue raising interest rates in the coming months as a way to combat inflation and other economic issues. For this reason, they believe a recession can be avoided, even though it may mean that Americans will end up paying higher prices for some time.
Alex Kuptsikevich – chief analyst at FX Pro – commented in a recent interview:
Current economic data indicates that the country’s tightening of monetary policy has already moved into a cooling phase and is back in the long-term trend of GDP growth. With such input, the chances increase that the Fed will soon sharply slow the pace of rate hikes and could switch to easing rather quickly. It is worth noting that in 2018, the Federal Reserve raised its rate to 2.5 percent, which caused the markets to crash and forced the regulator to switch to easing soon after.
Bitcoin has experienced severe downtrends in recent weeks. The asset rose to a new all-time high of around $68,000 per unit just nine months ago, although the asset is now struggling to maintain a position in the low to mid-$20K range. Ben Small, an analyst at UK-based digital asset broker Global Block, explained:
All eyes will now turn to any economic data that may conflict with the Fed’s goals. The FOMC must not only be prepared to seriously harm states’ growth prospects, but also come to terms with the realities of a looming recession and the job market under serious pressure.
store of value?
Alex Adelman – CEO of Lolli’s Bitcoin Rewards Program – also threw out his two cents, saying:
During times of market volatility, Bitcoin is gradually and increasingly being recognized by the market as a safe store of value and a source of stability.
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