Bitcoin, the world’s leading cryptocurrency, appeared to be on shaky ground heading into September, in what has traditionally been a challenging month for digital assets.
This uncertainty stems from a variety of factors, including the latest SEC decision as well as broader macroeconomic concerns.
August ended with bitcoin paring gains and suffering a setback after the SEC decided to delay its ruling on a bitcoin spot exchange-traded fund (ETF).
This regulatory delay has raised questions about the timing of possible mainstream adoption of bitcoin investment vehicles.
Experts weigh in on Bitcoin
Investors should keep a close eye on the growing U.S. budget deficit, according to Noel Acheson, author of “Cryptocurrencies Are Now Macro.”
in a bullock reportAcheson warned that widening deficits could lead to more debt issuance, but the combination of falling global demand for U.S. government debt and central bank efforts to reduce balance sheet holdings could create a shortage of buyers.
Acheson pointed out, “could encourage the Fed to change its strategy if urgently needed,” which could reignite the money-printing days of 2020-21.
He added: “Given Bitcoin’s sensitivity to liquidity, its inverse relationship with the U.S. dollar and its escape from the economic downturn affecting the world’s largest economies, this should lead to Bitcoin outperforming equities again.”
BTCUSD trading at $25,931 today. Chart: TradingView.com
Bitcoin has a historic struggling pattern in September, a six-year streak of underperformance. Acheson pointed out that even in the final stages of the last bull market in 2021, the alpha currency fell 7% in September before rebounding the next month with a 40% gain.
Tom Essaye, founder of Sevens Report Research, also highlighted the Fed’s intense focus on “super core” inflation, which has soared to 3.9% from 3.2% in June. He expects the Fed to take a tougher stance, a factor that has yet to be fully reflected in financial markets and the cryptocurrency space.
Faced with these challenges, Bitcoin bull Anthony Pompliano proposes more optimistic outlook. He sees two potential shocks in the coming months that could reignite a bull market reminiscent of 2020.
at the latest TV interviewPompliano expects regulators to eventually approve a spot-based Bitcoin ETF, significantly boosting BTC’s accessibility and adoption.
Additionally, he said that the approval of a Bitcoin ETF, which coincides with the next BTC halving, which is expected to occur in April 2024, could propel Bitcoin into a full-fledged bull market.
As Bitcoin navigates these turbulent waters, the cryptocurrency community remains focused on regulatory developments, macroeconomic shifts, and the potential for upcoming market-changing catalysts.
Featured image from Institute of Corporate Finance