TL; DR
-
Bitcoin just got a double dose of ‘positive fuel for price movement’.
-
The first was yesterday’s Grayscale victory over the SEC. The second was the news that US job openings are drying up. That sounds like bad news (and it is), but it also fuels Bitcoin’s upward price movement.
-
As a result of the above news, investors are pre-emptively buying Bitcoin in hopes that it will flourish in the coming months.
Full story
Good news: we have bad news… which in turn is good news.
Confused? The same. Here’s what we’re talking about…
Bitcoin just got a double dose of ‘positive fuel for price movement’.
The first was yesterday’s Grayscale victory over the SEC.
The second was the news that US job openings are drying up. That sounds like bad news (and it is), but it also fuels Bitcoin’s upward price movement.
This is why:
The Federal Reserve has been at war with inflation for the past year, raising interest rates at a nearly constant rate.
The idea is…
Interest rates go up → people have to spend more on paying off their credit/loans → they have less to spend on living expenses → companies lower their prices to keep up sales → inflation slows down → we all live long and long happy.
One thing the Fed looks at when trying to track the effects of their rate hikes is job availability.
If there are a lot of job offers, it means companies have money to spend, and if they have money to spend, it means that these rate hikes aren’t putting enough pressure on the economy to lower spending and inflation.
But! Vacancies are drying up (that’s the bad news). That means the Fed has less incentive to raise rates further (that’s the good news).
If interest rates stop rising (or better yet, falling), it means people will have more money to spend on non-essentials, such as Bitcoin.
As a result (and the Grayscale news), investors are pre-emptively buying Bitcoin in the hopes that it will flourish in the coming months.
What a week!