The bitcoin price is now $23,042.80! That’s fantastic news, right? It has to be the start of something new, amazing, and fresh. It must mean that bitcoin is going to reclaim those highs of 2021! Wait, not exactly. There is no reason to think that this will continue and get back to $60,000 or more over the course of this year.
But why is that?
Let’s find out.
Pain is Everywhere
There is no reason to believe that the general pain that is taking place across the world will be over anytime soon. When we are talking about pain here, we are not talking about the rise of loneliness, obesity, or other societal ills.
Nay, we are talking about the financial pain that we are witnessing across the economy and markets. Firms from Google to Meta are laying off employees, overall costs have gone up, and firms like Intel are reporting lower earnings due to lower demand.
Indeed, there’s pain everywhere but bitcoin is still up. Why?
The factors we see above clearly indicate that it is not a good economic backdrop but still there has been a resurgence technology stocks and the markets in general.
Are good times back again?
The Government Is Here to Help Bitcoin and the Markets?
Investors may think that the monetary conditions may ease and that the government may step in to provide some form of stimulus. If that is the case, then they expect stocks and other risk assets like bitcoin to have some more life. They may expect a reversal in the trend.
It seems like that is not the case. More bankruptcies may be on the horizon and more pain.
The government seems to have focus on bringing inflation down and ensuring that the economy is not overheated. Recent data shows that jobless claims are down and that GDP grew. That seems like an economy where inflation may stay strong.
Not good. That doesn’t work for a large portion of the population as they check their bank accounts and see lower balances due to elevated egg prices and the like. That does not work for policy makers as they expect to inspire confidence in the voter base.
The financial and monetary conditions are likely to remain the same.
That means that pain seems to stay for a while. Bitcoin and other digital assets may see some price growth but will likely decline. It may even crash to $6,000 depending on the level of uncertainty. Will bitcoin go to zero? Unlikely. But digital assets among other asset classes may see very tough times ahead, at least for the near future.