The price of Bitcoin reached a new all-time high this week at around $69,200 and then immediately fell by $10,000. Bitcoin has now recovered somewhat, but it is the full picture of the financial world that is currently causing a lot of uncertainty.
What's going on?
- Bitcoin is going through the roof as if there will never be another recession
- Flood US bank stocks as if another banking crisis were coming
- Inflation is rising again, which means interest rate cuts are likely to come later
- The price of gold rises as if a recession is coming
- The S&P 500 is trading as if we are in a new bull market
- Government bonds rise as if the US central bank will cut interest rates
Everything is behaving almost paradoxically at the moment. What should we believe and perhaps the most important question: What should we do now?
the current situation:
1. The S&P 500 is trading as if it is in a new bull market
2. Regional bank stocks collapse as if the crisis never ended
3. Bonds rise just as the Fed lowers interest rates
4. Inflation data is rising as interest rate cuts are cancelled
5. #Bitcoin Growing…
– Al Qubaisi Letter (@KobeissiLetter) March 6, 2024
A very popular social platform that invests in Bitcoin and goes public
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Bitcoin news
Is there more than that?
My suspicion is that there may be a general flight towards scarcity. Perhaps it has not escaped your notice that the American national debt is growing more and more. As a result, America's annual interest payments are rising, the budget deficit is widening, and the United States has to take on more debt.
This threatens to create an unprecedented vicious circle. Will investors start to understand this?
This would at least explain why stocks, Bitcoin and especially gold are rising at the same time. Typically, gold acts as a kind of safe haven in times of economic adversity.
Traditionally, gold is seen as the asset you buy when stocks enter a difficult period. In this regard, all the laws of the investment world are turned upside down. Right now, it seems as if investors are buying everything that is scarce and that the government cannot print.
Mystery reigns
But this theory is also not entirely correct, because bond prices have also started to rise again. You usually only see this when the US central bank lowers interest rates. Certainly not if interest rates are expected to remain at this rising level for much longer, as appears to be the case now.
It is also interesting to watch the banking crisis that currently seems to be brewing. Especially since the Bank's Term Financing Program (BTFP) ends on March 11. This is the rescue program created by the US central bank in 2023 to end the banking crisis.
US banks are likely to face more problems starting March 11.
Based on economic data, it is very difficult to predict the price of Bitcoin at the moment. Although the macroeconomic situation does not seem to be greatly affecting the current market. The focus is (logically) primarily on the performance of Spot Bitcoin ETFs, which continue to be very successful.
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