Why is Cryptocurrency Growing?
Today, Bitcoin broke through the $97,000 level for the first time since February, which caused the entire market to rise. The S&P500 index also recorded growth of 1.29%, after yesterday's fall.
✔️ The main reasons for the growth:
🏦 1) Possible Fed Rate Cuts: Yesterday's GDP data showed the US economy contracted to -0.3%. Negative GDP numbers for several quarters in a row make it more likely that the Fed will cut rates and save the economy.
🛢 2) Falling Oil Prices: Crude oil prices fell nearly 18% in April, marking the worst month since the pandemic began.
💵 3) Falling oil prices push down the dollar index as less is bought to pay for oil deliveries. A weak dollar encourages riskier assets to rise.
🪙 4) Gold Rising: Chinese investors poured into gold ETFs at the fastest pace in history this month, more than doubling the previous record. BTC is correlated with gold.
❗️ However, a new month has begun, with more reports and important economic data to come, especially on inflation. Economists are forecasting higher inflation due to tariffs, which will force the Fed to keep rates higher longer.
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