Bitcoin Holds Steady as US GDP Grows 3.3% in Q4
Bitcoin remained stable on Thursday morning as the US reported a 3.3% growth in its gross domestic product (GDP) during the fourth quarter, surpassing economists’ expectations of 2% growth. However, the Bureau of Economic Analysis (BEA) noted that the growth rate had slowed down from the previous quarter’s 4.9% rate.
Economy Keeps Pace with Inflation Rate
The GDP growth in Q4 indicates that the economy is nearly keeping up with the 3.4% inflation rate observed in December. Inflation refers to the rate at which prices rise for goods and services. Higher inflation can make consumers feel like their money has less purchasing power.
Consumer and Government Spending Drive Growth
The BEA’s report highlighted that strong consumer and government spending were key factors behind the growth seen in Q4.
Bitcoin Trading Volume and Price
At present, Bitcoin is trading at $39,817 after recently crossing the $40,000 mark. The cryptocurrency witnessed approximately $30 billion worth of BTC trading volume yesterday, according to CoinGecko data.
Possible Expiration of Crypto Futures
The positive US GDP report coincides with the potential expiration of billions worth of crypto futures. These futures are derivatives used by investors to speculate on future price movements of assets such as commodities, currencies, or cryptocurrencies.
Rolling Positions Forward
Derebit Chief Commercial Officer Luuk Strijers stated that despite the approaching expiry date, there are indications that many traders do not intend to let their contracts expire just yet. He mentioned that there has been significant activity in January and February expiries, suggesting that traders are rolling their positions forward.
January’s Market Developments
January was a particularly eventful month, with the approval of 11 different spot Bitcoin exchange-traded funds (ETFs), substantial trading volume for these ETFs, and significant outflows from Grayscale Bitcoin Trust as investors sold their locked-up shares. These selling pressures have posed challenges for Bitcoin, causing its price to drop to as low as $38,678 earlier this week.
Hot Take: Bitcoin Remains Steady Amidst Positive US GDP Growth
Bitcoin has maintained its stability amidst the news of the US GDP growth exceeding expectations. The economy’s performance suggests it is keeping up with inflation rates, which is crucial for maintaining consumers’ purchasing power. Strong consumer and government spending were key drivers of growth in Q4. Additionally, Bitcoin’s trading volume remains high, indicating continued interest from investors. Although there is the possibility of crypto futures expiring soon, signs suggest that many traders are rolling their positions forward rather than letting them expire. Overall, Bitcoin’s resilience in the face of market developments demonstrates its potential as a reliable digital asset.
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