Over the past few months, Bitcoin has been traded on the macro ground of economic uncertainty for the first time in its relatively short decade.
Although Bitcoin (BTC) has not been able to match earnings from other hard currency forms such as gold over the past few weeks, it has performed surprisingly well considering its relatively small market size.
There are several trends that quickly reveal which direction BTC is moving in next year, including the upcoming halfway.
Global Markets Send Mixed Signals to Investors
The unprecedented nature of the current global economic situation left the bulls and bears loosely. While the stock market is stable, key economic power measures such as consumer spending and unemployment are increasingly gaining weight.
These data metrics are expected to be related to market performance, but the Fed’s measures for economic conditions seem to work because of the coronavirus pandemic.
This lack of direction in traditional markets has affected even smaller foreign markets such as crypto, Bitcoin saw a weak price movement of about $ 7,000 last week and its volatility approached other market data.
In the chart below of crypto research firm Skew, the volatility seen in S&P 500, gold and Bitcoin seems to have decreased together over the past month.
This shows how Bitcoin’s fate in the near term is still tied to global markets and how trends can change drastically if the economy continues to weaken. It also gives information about whether Bitcoin will establish a long-term correlation with gold.
Global Inflation Paves the Way for Bitcoin (BTC)
Almost all fiat currencies have recently seen an unprecedented level of inflation, especially as governments issue unlimited money to finance their economic stimulus packages.
The devaluation of these currencies takes place just a few weeks before Bitcoin’s half-time event, which cuts the cryptocurrency’s inflation rate by half and displays the deflationary features of the cryptocurrency.
The ironic timing of this event could ultimately increase the “digital safe haven” narrative and help Bitcoin establish a closer relationship with gold. However, it does not seem possible to talk about such a bright future for most countries. Faced with large-scale deadlocks, countries will weaken their economies.