Photo by Brian Wangenheim on Unsplash
Earlier in September we highlighted the importance of liquidity and the impacts it has on the Bitcoin price. If you missed it, you can catch up on the charts and blog Liquidity is everything!
The Federal Reserve has started cutting rates again to help lower borrowing costs. This could impact the stock market - the S&P 500 tends to go down by about 4% in the first six months after the first rate cut if we're in a recession, but can go up by about 14% (on average) if we're not.
Economists (the talking heads) don't think we're in a recession right now, but there are some signs it could be coming. We'll have to wait and see, but this can be seen as a tailwind for Bitcoin if we are in fact not experiencing a recessionary rate cut.
Further to this, its worth highlighting the recent news about China unleashing a stimulus package to boost their economic growth. The measures include cuts to the benchmark interest rate, with more fiscal measures expected to be announced soon.
“Yet another tailwind for Bitcoin”
Let's keep an eye on how these developments unfold, but good news for the Bitcoin world!
We have adjusted our allocation, but remain cautious, but as always our our long term bullish case for Bitcoin is unchanged.
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