Silicon Valley techies have long viewed Jack Dorsey as the “next Steve Jobs” because of his peer-reviewed tech prowess. X (formerly Twitter) has changed the world, and Dorsey’s payments company Block (formerly Square) with its CashApp app was one of the earliest adopters of Bitcoin.
Jack Dorsey – Founder of X
CashApp began offering Bitcoin custody in 2019, allowing users to buy BTC with credit cards. Overnight, users began doing on a small scale exactly what Strategy (formerly MicroStrategy) had recently done and become a phenomenon on Wall Street.
Square, now renamed Block, has seen its stock plummet 20% since May began. Dorsey has warned investors that American consumer spending is struggling. Ironically, while this is bad news for Block’s business model, it could be the catalyst for Bitcoin’s $1 million rally.
Will Weak Purchasing Power Cause the Fed to Cut Rates?
Following Block's earnings report, the CEO of one of the world's largest payment processing apps said that user spending behavior has changed dramatically.
“This coincided with lower-than-expected cash inflows. Cash App spending on essentials such as food and gasoline remained fairly stable during the quarter, while discretionary spending such as travel and media was more significantly impacted. We believe the consumer weakness was the primary reason for missing our guidance.”
The spending cuts led to a drop in first-quarter sales, sending the US economy into negative growth for the first time in three years. If that continues in the second quarter, it would meet the most common definition of a recession as understood by economists.
As a result, the central bank is likely to cut interest rates to stimulate business activity again. A CNBC survey found that the likelihood of a rate cut this year is quite high given the shaky economy.
This could be the very thing that sends Bitcoin soaring to $1 million, as Jack Dorsey once predicted.
Dorsey Predicts Bitcoin to Hit $1 Million by 2030
When the Fed cut interest rates in 2007–2008, Bitcoin first started to operate. During the following years of low interest rates, the price of BTC skyrocketed from almost zero to $20,000 in December 2017.
By then, the Fed had raised interest rates again and Bitcoin prices had plummeted. Bitcoin began to recover after the Fed cut interest rates again in 2020 and reached a new high of $69,000 in November 2021.
Today, the scene looks quite similar, but the actual Bitcoin price is still above $100,000, despite the Fed refusing to cut interest rates three times in a row.
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Disclaimer: This article is for informational purposes only and is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.