Bitcoin price rises, but chance of a recession also rises
The bitcoin (BTC) price skyrocketed yesterday after the positive news regarding the lawsuit between Grayscale and the U.S. Securities and Exchange Commission (SEC) regarding the spot bitcoin ETF. Now, it will be interesting to see if the bulls can push the bitcoin price further up because there is still a difficult environment for bitcoin due to the aggressive interest rate hikes of the U.S. central bank (Federal Reserve).
In today’s macro update, we look closely at some key data points from the U.S. economy.
Recession in America or not?
The big question remains whether we will get a recession as a result of the Federal Reserve’s aggressive interest rate campaign, which is intended to bring inflation back to the desired 2.0 percent. An important factor in this issue is the US labor market, which has managed to remain surprisingly strong despite the interest rate hikes.
This week, however, some weaker data came in from the U.S. labor market in the form of the Job Opening and Labor Turnover Survey (JOLTS), which has been revised downwards for the month of July from 9.165 million to 8.827 million unfilled vacancies in America.
Furthermore, consumer confidence in the United States also came in with a sharp setback at 106.1 versus the 116 that was expected. The American consumer’s current financial situation and expectations for the next six months have fallen sharply.
Would the American consumer’s piggy bank run out? That’s what it’s starting to look like.
What does this mean for the bitcoin price?
The chances of a recession in the United States increase with this new data, which puts additional downward pressure on the bitcoin price. Of course, we saw a nice surge yesterday due to Grayscale’s victory in the ETF lawsuit against the SEC.
Now, whether that positive momentum can continue or whether macroeconomic conditions will prevail again. The latter seems the most likely scenario, as the victory in the lawsuit does not mean that a spot bitcoin ETF will enter the US market immediately.
In that respect, the rest of 2023 could still be bearish for Bitcoin, with the only wild card being the arrival of an ETF. So, these are exciting times for Bitcoin and the crypto market.
