The current price of Bitcoin is nothing special, but it feels good compared to where we were two weeks back. Bitcoin, Ethereum, and even altcoins rallied in the last 2 weeks, and the fed interest rate hike only boosted things further. So, the question is, will Bitcoin pull off a disbelief rally in this economic crisis? The digital asset manager CoinShares thinks that could happen. The company is of the opinion that the current government policies and economics will diverge Bitcoin from other investment assets.
Bitcoin might pull off a disbelief rally
The weaker the dollar gets, the better it is for Bitcoin. Since Bitcoin is measured in dollars, a lower dollar value means more value for BTC. Even though right now, the federal reserve is hiking interest rates and controlling inflation, they are likely to lose up a bit in the future. And that will be the time when the dollar will weaken even more.
CoinShares also talks about government policies where even a small mistake could diverge Bitcoin’s correlation with the USD and Feds. Recession and Stagflation won’t have much of an effect on Bitcoin. They could, in fact, be stimulators that trigger another rally as the adoption of Bitcoin rises. Even Bianace’s CEO, CZ Zhao, is of the opinion that Bitcoin will bloom with high inflation and recession.
Bitcoin is also very sensitive to interest rate hikes which means the decisions that the Feds take in the future will also affect how the market reacts. Currently, Bitcoin is much more correlated to growth stocks and other equities rather than Gold showing its risk-on nature.
Insurance in recession
CoinShares believes that the US and the entire world are likely to head towards an economic recession. And if that happens, Bitcoin is the insurance one must have. In case the US is unable to control inflation, then Bitcoin will rally. On the other hand, if we enter into a full-blown recession and inflation declines, Bitcoin is going to be range-bound and volatile. Stagflation is also a scenario that Coinshares think might push Bitcoin’s price up.
What are your thoughts as Coinshares says Bitcoin might pull off a disbelief rally? And do you think we will hit $25k soon? Let us know in the comments below. And, if you found our content informative, do like and share with your friends.
Also Read: CoinFLEX lays of staff to reduce expenses by 60%.
