As a seasoned researcher with a background in both traditional finance and cryptocurrencies, I have witnessed firsthand the dynamic interplay between macroeconomic indicators, market sentiment, and digital assets like Bitcoin (BTC).
On October 16th, Bitcoin (BTC) momentarily soared to a peak of $68,400, which was its highest point since August. However, maintaining this elevated level turned out to be more challenging than expected, and now, Bitcoin is trading below $67,500. The main concern at present is whether the bullish momentum of BTC price can be reestablished.
In the U.S., robust economic figures surpassing expectations led investors to lose interest in non-traditional protection strategies, as they turned their focus towards the stock market following a stellar earnings report from TSMC.
In simpler terms, the broader economic situation significantly influenced Bitcoin’s failure to reach $68,000, but a specific incident within the crypto world has sparked optimism that the current Biden-Harris administration might adopt a friendlier stance towards cryptocurrencies.
Is a strong US economy a net negative for Bitcoin’s price?
Last Tuesday, the U.S. Labor Department revealed that the number of jobless claims dropped by 19,000 during the week ending October 12th. This figure represents a significant reduction and can be seen as a substitute for corporate downsizing, suggesting that the economy is generally stable. Furthermore, the United States Commerce Department’s Census Bureau disclosed on Tuesday that retail sales in August experienced a 0.4% increase compared to July, indicating a slight growth in consumer spending.
According to Jonathan Millar, a senior economist at Barclays, consumer spending, job creation, and wage growth have been moving in a strong, self-reinforcing cycle during this economic expansion. This increased spending is generally seen as beneficial for corporate profits, making the stock market more appealing compared to Bitcoin.
On October 17, the rise in S&P 500 was primarily fueled by Nvidia (NVDA), whose stocks rose by 3% to set a new record high. This growth stemmed from the positive results and increased revenue forecast for 2024 announced by Taiwan Semiconductor (TSMC), a significant AI chip supplier. As a result, TSMC shares skyrocketed by 13%, drawing in investors and their funds.
Is it not a question of whether Bitcoin and tech stocks are direct competitors, but rather, a portion of its worth stems from “risk-on” investments, where investors pursue returns in sectors that thrive during periods of heightened market liquidity. This dynamic has become more pronounced as Bitcoin spot exchange-traded funds (ETFs) have amassed over $50 billion in managed assets.
Bitcoin’s momentum could shift if Ripple wins in court
As a crypto investor, I eagerly anticipate a potential shift in regulatory stance from the Biden Administration, which could be hinted by a court victory for Ripple. According to analysts, the US Securities and Exchange Commission (SEC) may have overlooked their deadline to file an appeal brief in the ongoing Ripple case. If the SEC indeed fails to submit this brief, Ripple could push for a resolution that favors them.
According to the SEC, Ripple is accused of not registering the sale of XRP tokens and offering them as unregistered securities, which goes against federal securities laws. Meanwhile, some analysts argue that the SEC filed an appeal notice on October 2, meaning the deadline for filing briefs is now set for October 18.
In one aspect, robust economic data might temporarily suppress Bitcoin’s price in the near future. However, should the SEC lose their appeal in the Ripple case, this could be seen as a favorable sign by investors, possibly sparking renewed optimism and potentially boosting the market for Ripple.
This piece is designed primarily to provide general knowledge and shouldn’t be construed as legal or financial guidance. The perspectives, ideas, and viewpoints shared are those of the writer and may not mirror or align with the views and beliefs of CryptoMoon.
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2024-10-17 22:37