CoinShares stated that Bitcoin has exhibited increasingly gold-like price behavior over the past two weeks, and renewed concerns about the US fiscal sustainability have supported the rise in
CoinShares stated that Bitcoin has exhibited increasingly gold-like price behavior over the past two weeks, and renewed concerns about the US fiscal sustainability have supported the rise in BTC. According to the company, the US Treasury Department’s purchases of long-term government bonds and concerns about public debt have been instrumental in Bitcoin’s rise from lows of $60,000 to $80,100.
However, CoinShares added that the main constraint on Bitcoin’s rise remains the Fed’s monetary policy. The company assessed that for Bitcoin to achieve a sustained breakout above $80,000, one of two main scenarios might need to materialize.
In the first scenario, a resolution to the conflict with Iran would lead to a decline in oil prices and, consequently, inflation expectations. Such a development could reduce inflationary pressure on the Fed, creating a more supportive environment for risky assets.
The second scenario involves a further weakening of confidence in US government debt. According to CoinShares, deepening concerns about the sustainability of the US debt could lead investors to turn to non-governmental stores of value such as Bitcoin and gold, potentially strengthening demand for BTC.
*This is not investment advice.
Continue Reading: There Are Two Conditions for Bitcoin to Remain Above $80,000
