Main takeout:
The demand for institutional investors and the adoption of the company can be further enhanced by Bitcoin despite the economic downturn.
Investors’ beliefs that US Federal Reserve Banks will have interest rates increase the price of Bitcoin.
The world’s stock market responded positively to the temporary suspension of import tariffs between the US and the European Union, which had an increase of 1.5% of S & P 500 on May 27. However, concerns about the global economic recession have increased Bitcoin (BTC) after Bitcoin (BTC) rose, especially after the US import rate rose in most regions.
Bitcoin remains in antiFragile and is outstanding at uncertain times.
As the uncertainty of investors in the economic situation increased, Bitcoin surprised investors by reminding us of $ 110,000 in Bitcoin, ranking sixth in the world’s worldwide assets by market cap. Investors are now inevitable whether Bitcoin is becoming a fire festival or a drop of less than $ 100,000 in the economic downturn.
Traders are currently estimated that the US Federal Reserve Bank (FED) is likely to maintain interest rates by September due to a steep rise from 2% a month ago.
In general, risky assets such as Bitcoin have higher capital costs. But in this context, we propose the Fed’s potential liquidity injection, given the unfavorable US fiscal outlook, which exceeds profit capacity.
US President Donald Trump demanded low interest rates, but Chairman Jerome Powell is still carefully cautious due to strong labor markets and inflation pressure due to tariffs and easy credit conditions. This tension helps to explain why the S & P 500 rose 6,147 times in February and why Bitcoin’s rise is limited.
Bitcoin’s current market cap describes the $ 112,000 resistance level, exceeding the market cap of Google and META, which is $ 2.2 trillion. Nevertheless, it would be inaccurate to suggest that Bitcoin is separated from a traditional market. The 30 -day correlation with S & P 500 has been maintained at more than 70% over the last four weeks. Therefore, if the stock enters the bear market, Bitcoin is likely to fall.
The company currently reports income in the first quarter, which is the period of preceding the escalation of the trade war. As a result, macroeconomic indicators show signs of contractions, but the stock market can take a long time to reflect the complete negative impact. In April, which was reported on May 27, the 6.3% decrease in US durable product orders could be the first signal of the weakening economy.
However, even if corporate income in the first quarter does not meet expectations, the S & P 500 cannot be very difficult. In fact, the disappointing results can open the door for faster interest rates, which tends to benefit the company by lowering financial costs and potentially stimulating consumer demand.
As strategic assets grow, Bitcoin’s appeal, Trump Media joins the party.
Trump Media and Technology Group seems to have improved Bitcoin’s risk profiles after the plan to acquire BTC according to $ 2.5 billion debt and stock financial combinations. According to Reuters, Trump Media’s CEO said, “We see Bitcoin as the pinnacle of financial freedom.” This development suggests that Bitcoin’s orbit for $ 112,000 is not entirely associated with extensive economic growth.
relevant: Bitcoin is $ 110K, but institutional investors continue to BTC.
As institutional and corporate interest in Bitcoin grows, a new dimension is added to market behavior. The correlation between macroeconomic trends and traditional assets is still important, but Bitcoin is becoming more and more frame as a strategic asset with utility beyond speculation. Thus, the performance can be at least in part, as the adoption of influential companies and investors is especially partially.
The stock market may be sensitive to macroscopic data and import surprises, but Bitcoin’s upward potential seems to have mixed a new role as a hedge for monetary policy, institutional positioning and systematic financial risk.
This article is for general information purposes and should not be considered legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.