Experts Say That Data From the US Economy Is Good for Bitcoin

Experts Say That Data From the US Economy Is Good for Bitcoin

The quarterly increase in the US Gross Domestic Product (GDP) met market expectations, with a rise of 1.4%. In addition, the Core Personal Consumption Expenditures (PCE) inflation dropped to 2.6%, which aligns with analysts’ forecasts. Another significant piece of market data was the unemployment claims, with the initial allegations falling short of expectations and the continuing claims surpassing predictions. According to experts, this presents a favorable outlook for cryptocurrency.

Investors May Pay Close Attention to Bitcoin

Jag Kooner, the Head of Derivatives at Bitfinex, points out that the deceleration in GDP expansion indicates a possible economic slowdown, which might affect investor confidence. As a result, this change in sentiment could spark more interest in Bitcoin and other digital assets as alternative investment options, especially if traditional markets display indications of decline.

According to Kooner, historical patterns suggest that in times of economic downturn, investors frequently seek out Bitcoin as a means of preserving their wealth.

Ben Kurland, the CEO of DYOR, also views the consistent growth of the GDP as a sign of stability. This could potentially benefit the crypto market, as investors may feel less compelled to transfer their funds away from more volatile investments.

Stability in the Cryptocurrency Market Is Not Worth Waiting For

Nevertheless, the increased number of ongoing unemployment claims brings about a certain level of unpredictability, which could dampen investor assurance. According to Kurland, the crypto market is expected to remain volatile as it tries to find a balance between the stability of traditional markets and a sense of caution.

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In addition, the initial job claims showing a slight improvement may suggest increased economic stability, which typically benefits the cryptocurrency industry, as stated by Marko Jurina, CEO of Jumper. Exchange. “If not satisfactory, at the very least neutral,” he added.


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Name Price24H (%)
Bitcoin (BTC)
$29,078.00
-3.19%
Ethereum (ETH)
$1,948.11
-4.71%
Tether (USDT)
$1.00
-0.03%
BNB (BNB)
$295.60
-1.51%
Cardano (ADA)
$0.51
-10.30%

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Jurina further emphasizes that the GDP figures indicate a deceleration in the US economy, possibly due to the impact of elevated interest rates. I predict that the Federal Reserve will likely begin reducing interest rates in September or even earlier in order to support and strengthen the economy.

Investors Favor Safe Assets

The prevailing uncertainty could potentially affect the influx of spot Bitcoin exchange-traded funds (ETFs). This is because investors tend to gravitate towards safe-haven assets rather than risk assets, as highlighted by Kooner. “It’s yet to be determined whether BTC will attract interest based on that.” Moreover, the expected restart of the bullish market could magnify these inflows.

“Traditionally, in times of economic decline or uncertainty, Bitcoin has displayed an inverse relationship with stocks, demonstrating resilience as stocks falter. A crucial factor to keep in mind is that the commencement of an upward trend in cryptocurrency bull markets usually occurs around 10-12 weeks after the halving. As we approach July and the third quarter, we draw nearer to that timeframe, which is further amplified by the highly significant bullish catalyst of the Ethereum ETFs going live.”

— Jag Kooner

As we look forward to July, investors need to keep an eye out for a potential resurgence of volatility in both traditional markets and the world of cryptocurrencies. Regulatory changes and macroeconomic policies will heavily influence the direction of the market.

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It is worth mentioning that the data from Fed Funds futures indicates that the market is still anticipating and factoring in two rate reductions in 2024. Kooner emphasized the significance of monitoring the Fed’s statements and the potential continuation of a more hawkish stance.


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