Despite all the ghost stories, the US economy continues to produce good numbers. This week, retail sales figures were higher than expected, leading the Atlanta Fed’s GDPNow model to predict higher real economic growth for Q3 2024.
They now expect growth of 3.4%, compared to 3.2% previously. These are absolutely not numbers that point towards a recession and that is bullish for Bitcoin.
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Why is that bullish for Bitcoin?
Let’s get the facts straight.
- Central banks have started cutting interest rates
- The US economy is growing at ~3% per year
- The US government is stimulating the economy with its budget deficit of 6%-7% per year
- Global liquidity is rising
- Financial conditions are easing
Taken together, these circumstances make banks and other lenders more eager to hand out new loans. As a result, more capital enters the financial system (read: global liquidity increases), and that capital has to go somewhere.
Storing capital in the US dollar is becoming less and less attractive due to the high debt levels of the US. For that reason, investors are increasingly turning to gold, shares, real estate and of course Bitcoin.
Basically, the current situation is bullish for almost everything that the government cannot print.
Are there still things standing in the way of the bull market?
Of course, there are things that can prevent the bull market from happening. Consider, for example, the onset of a global recession. At the moment the chance of this seems small, but we can never rule things out completely. Certainly not in the financial system.
In addition, the strong American economy ensures that there is again upward pressure on inflation, or at least that it remains so. Inflation could therefore become a problem again, and that of course limits the US central bank’s room to lower interest rates.
It is therefore possible to imagine scenarios in which the year 2024 will end less well for Bitcoin. For now, however, the Bitcoin price is doing well and we are on schedule to continue the bull market.
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Source: https://newsbit.nl/bullish-voor-bitcoin-de-amerikaanse-economie-doet-het-prima/
