The Resilience of the US Economy and Its Implications for Bitcoin
The recent unexpected addition of 336,000 jobs in September showcases the resilience of the US economy, which could have positive implications for the growth of Bitcoin (BTC), according to Yield App chief investment officer Lucas Kiely. In an opinion piece for Cointelegraph, Kiely highlights the impressive performance of the world’s largest economy despite challenging circumstances and suggests that this strength may benefit Bitcoin.
Kiely points out that the strong job growth in September is noteworthy considering the rising yields on longer-term Treasury bonds and surging mortgage rates. This indicates that the economy continues to forge ahead even as the Federal Reserve enforces tighter monetary policies.
Economy Pushes Forward Despite Monetary Tightening
A key message from the employment data is that the US economy remains determined to push forward despite aggressive monetary tightening. Kiely emphasizes that higher interest rates are likely to be a long-term feature of the economic landscape, highlighting the economy’s resilience.
While these developments may make some traditional market investors uneasy, there are broader economic implications to consider. Although traditional stocks may seem less attractive compared to savings accounts with a 6% return, there are signs that the bond market’s relentless sell-off may be slowing down. A potential end to this sell-off could signal a new bull market for risk assets.
Bitcoin Price Tied to Regulatory Decisions
The article also suggests that Bitcoin’s short-term price movements remain closely tied to regulatory decisions, particularly those concerning the approval of a spot Bitcoin exchange-traded fund (ETF). Despite positive news about spot ETFs, Bitcoin’s price has largely remained stagnant.
Kiely’s analysis suggests that if a Bitcoin spot ETF is approved, it could trigger significant inflows into Bitcoin and potentially lead to a resurgence in the broader crypto market. Additionally, the Federal Reserve’s role in shaping the trajectory of risk assets is crucial. If the Fed halts its rate hikes, it could stimulate expectations of an impending rate cut and set the stage for a substantial risk-on rally across various asset classes, including crypto.
Hot Take: The US Economy’s Strength Bodes Well for Bitcoin
The unexpected addition of jobs in September demonstrates the resilience of the US economy, which could have positive implications for the growth of Bitcoin. Despite rising yields and surging mortgage rates, the economy continues to move forward even with tighter monetary policies. This resilience may benefit Bitcoin as investors seek alternative assets. Furthermore, if regulatory decisions, particularly regarding a spot Bitcoin ETF, align favorably, it could trigger significant inflows into Bitcoin and potentially revive the broader crypto market. The Federal Reserve’s role in shaping risk asset trajectories is also crucial. If the Fed halts rate hikes, it could spark expectations of a rate cut and fuel a risk-on rally across various asset classes.
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