In a surprising turn of events, Bitcoin, the world’s largest cryptocurrency, has been outshone by tech giant Nvidia over the past year. While both assets have enjoyed significant gains, Nvidia’s performance, driven by the AI boom, has eclipsed Bitcoin’s.
Despite this, Bitcoin has still managed to outperform major tech companies like Google, Microsoft, Apple, Meta, and Amazon. The cryptocurrency’s 12-month risk-adjusted returns have outpaced those of its tech counterparts, highlighting its resilience in a volatile market.
However, the broader economic landscape is casting a shadow over the cryptocurrency market. A recent market downturn, impacting both Bitcoin and Nvidia, has coincided with growing concerns about a potential US recession. Ecoinometrics warn that Bitcoin, as a risk asset, could face more challenges if the economic slowdown goes further.
The cryptocurrency market, including Bitcoin, has been under pressure due to recent economic headwinds. A sharp market correction, affecting both Bitcoin and Nvidia, coincided with rising US unemployment figures, fueling recession fears. Economic analysts warn that Bitcoin, like other risk assets, could underperform during an economic downturn. Conversely, an increase in monetary liquidity could potentially boost Bitcoin’s value.
The global economic landscape is further complicated by rising interest rates in Japan and a strengthening Yen, which could impact Wall Street tech companies.
Bitcoin is currently hovering near a key support level, with its price at $60,691.59. Increasing selling pressure may lead to a further decline in its value.
According to Rekt Capital, historically, Bitcoin’s price typically broke out about 150-160 days after a halving event. Since the most recent halving happened 110 days, investors anticipate the price to stabilize for a while before possibly rising again.
Meanwhile, experts caution that the cryptocurrency market remains highly volatile and influenced by various factors, including macroeconomic conditions and investor sentiment.
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