Fintech
Here’s the main reason why Bitcoin will start its bull run
Bitcoin price has fallen sharply, hitting a four-month low of around $53,500, marking a decline of more than 9.3%. Despite significant Bitcoin sell-offs in Germany and fears surrounding the Mt. Gox liquidation, macroeconomic factors and continued risk appetite in traditional markets suggest a solid recovery.
However, the broader prospects for Bitcoin suggests that once these specific supply pressures are resolved, the market could bounce back strongly. In the meantime, here are some of the key reasons why Bitcoin could start its bull run soon.
Economic growth in G-7 countries
The G-7, a group of the world’s major economies, is currently in a phase of economic growth. This growth, combined with high interest rates, is encouraging investors to put more money into riskier assets like Bitcoin and stocks.
The OECD leading indicator, which foresees in the short term Economic trends have surpassed 100, indicating strong and accelerating growth.
Interest Rate Cuts to Boost Bitcoin
The U.S. Bureau of Labor Statistics will soon release its June Consumer Price Index (CPI) report. The report is expected to show a 3.1% increase over the previous year, down from a 3.3% increase in May.
This decline suggests progress toward the Federal Reserve’s 2% inflation target, which could lead to lower borrowing costs by the end of the year. Historically, lower interest rates have increased demand for Bitcoin, as seen earlier this year when interest rates fell short of expectations CPI Reports Boost Bitcoin ETF investments.
Tech Positivity Supports Bitcoin
Wall Street’s current optimism in the tech sector is another positive sign for Bitcoin. The ratio of the tech-heavy Nasdaq to the broader S&P 500 has hit record highs, reflecting strong investor confidence.
Bitcoin has historically rallied during periods when technology stocks perform well, tying their success to the growth of the technology market.
Concerns about a potential U.S. stock market bubble appear unfounded. According to TS Lombard, U.S. margin debt is growing slower than stock market capitalization, suggesting that market performance is not primarily driven by borrowed money. Investor positions in S&P 500 and Nasdaq futures are also close to neutral, suggesting stability.