Hello my fellow bloggers! Todays I want to discuss a possible reason why we don’t see BTC riding the wave of stimulus expectation. Let’s dive in and investigate.
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On the previous week, attention of all investors was fixed on stimulus vote in US senate. 1.9 trillion USD were at stake. In 2020 we saw how previous stimulus “saved’ all markets and started unbelievable growth. Crypto market enjoined stimulus checks coming for BTC and altcoins. For a few months, we all wondered how could it be, global economics is going down while stocks are storming new all time highs. Now we wonder will the new stimulus plan have the same effect on the market and will it be able to push bitcoin to a 6 digits price.
Now as the stimulus is almost here, we don’t see reaction we expected. What could be a reason for this? Going through the news, I came to a thought new oil wars are to blame. As you may know, oil price is growing fast on the latest attack on Saudi Arabia:
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We haven’t see this high price for many month. So how this is related to Bitcoin? Bitcoin is almost pure energy. The network exists while miners can be in profit. Bitcoin depends on energy price. As oil price rises, the price of electricity will rise as well. Bitcoin and other cryptocurrencies will be affected. The world economics will be affected even more. Oil is still the blood of our world. With all hits we took from COVID19, high energy prices will not be good for economy to recover. Institutional investors know this very well. BTC and altcoins are risky assets. With this state of economy and risks from oil market, it is hard to expect large investors purring billions into risky assets.
What happens next? I guess large investors will wait and watch. If energy market goes back to normal state and US government will hold to its commitments to support stock market, this will be taken as a green light to push Bitcoin up for high profits. Yet this is just my guess. We will see where outcome lies.
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I’m not a financial of any kind. I encourage you to check all information yourself and make decision only based on your own opinion. All articles are created for solely entertainment purpose.
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Thank you for posting @cryptohumster. You made a comment about higher oil/energy prices. Well, I guess higher prices are relative. Within the last 2 decades, actually, just prior to 2010, we were seeing about $160 a barrel, about 2.5 what it is today. And we adapted then and will probably do so again.
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