The price of BTC is significantly affected by macroeconomic and regulatory policies, generally focusing on:

Macroeconomic influences on inflation and monetary policy

Bitcoin is often seen as an inflation-resistant asset when the economy is unstable and inflation is rising. Similar to gold, when investors are worried about the devaluation of fiat currencies, they will put money into Bitcoin, driving up its price.

How to do it:

In addition to the Federal Reserve, central bank decisions of major economies such as the European Central Bank (ECB), the Bank of Japan (BoJ), the People’s Bank of China (PBOC) and the Bank of England (BoE) also need to be closely watched. The monetary policies of these central banks will affect global capital flows and, in turn, affect the price of Bitcoin.

The following are specific dates or timeframes for the major central banks to announce interest rate hikes, rate cuts, and other interest rate decisions:

Interest rate decisions

A rate cut (low interest rate) means lower capital costs (the diluted capital costs after the loan interest rate is low), and investors are more willing to enter high-risk markets, such as pie. Example: The wave of interest rate cuts by global central banks after the 2020 epidemic promoted the rise.

Money Supply

When the central bank prints money (increases money supply), the fiat currency depreciates, and Bitcoin becomes more attractive as an anti-inflation asset. Example: The Fed's quantitative easing policy drives market demand for Bitcoin. Where to see it: You can see it on Bloomberg, check the interest rate decision meeting section in the economic calendar, and set a reminder.

Global Economy and Liquidity: When global economic growth is slow and market liquidity is abundant, investors tend to seek high-return investment opportunities, leading to increased demand for Bitcoin and other crypto assets. In the case of tight liquidity, investors tend to reduce the allocation of high-risk assets.

The strength of the dollar

Bitcoin has a somewhat inverse relationship with the U.S. dollar. When the U.S. dollar strengthens, it usually suppresses the price of Bitcoin because Bitcoin is seen as a substitute for the U.S. dollar.

Similarities in safe haven assets

Both Bitcoin and gold are considered safe-haven assets, and investors often seek these assets as hedges when the market faces economic uncertainty or inflation risks. Since they are both "safe-haven tools" in certain situations, Bitcoin and gold will have a positive correlation in certain periods.

Regulatory policy impact

Different countries and regions have different policies on Bitcoin, which are about the legality of Bitcoin, the regulation of exchanges, and the legal framework of mining. For example, China's previous ban on Bitcoin mining and trading, and the regulation of cryptocurrency trading in the United States have directly affected market sentiment and Bitcoin prices. Tax policies As more countries begin to tax crypto assets, tax treatments and policy changes in different countries may affect market behavior and cause price fluctuations.

Countries recommended for policy observation

Focus on the regulatory policies of the United States, China, the European Union, Japan, South Korea, Singapore, the United Kingdom and Australia. The policy trends of these countries and regions will directly or indirectly affect the direction and sentiment changes of the global cryptocurrency market.

Cryptocurrency legal framework

As the international community pays more attention to cryptocurrencies, global regulatory frameworks or legal coordination will have far-reaching impacts. Major events such as the US Securities and Exchange Commission (SEC)'s decision on the approval of Bitcoin ETFs will have strong fluctuations in the market in the short term.

Market liquidity and institutional investors Institutional investor participation: As Bitcoin gradually becomes a mainstream asset, more and more institutional investors are entering the market, which makes Bitcoin's price fluctuations more closely linked to traditional financial markets. When macroeconomic factors cause stock market fluctuations, the asset reallocation behavior of institutional investors will also affect the price of Bitcoin. Derivatives market: Transactions in financial derivatives markets such as Bitcoin futures and options have also exacerbated price fluctuations, especially in times of economic uncertainty, when investors' risk aversion and arbitrage behavior will increase volatility.

inflation

Inflation will generally have a significant impact on the asset market when it exceeds 5%. When it is higher than the Fed's 2% for a long time, investors will seek tools to hedge against inflation, such as pie. Example: Inflation in the United States climbed above 5% in 2021, causing investors to turn to Bitcoin and other anti-inflation assets.

You can check inflation indicators such as CPI and PCE on Bloomberg, and the App can set reminders. Geopolitical events on a larger scale often include international conflicts, energy crises, sanctions and trade wars.​

Not all events require attention. Generally, when the scale of attention is large enough to affect the global supply chain, international trade and energy prices, it may affect the demand for assets such as Bitcoin.

Several apps can view the relevant data mentioned above

Bloomberg can track macroeconomic information such as the US dollar exchange rate, inflation data, and Federal Reserve policy trends, which are key data that affect Bitcoin trends.

Investing.com tracks global economic indicators, currency fluctuations, and futures markets.


Trading Economics provides global economic indicators such as GDP, employment rate, trade balance, inflation, etc.

Decrypt cryptocurrency policy update.

CryptoQuant on-chain data analysis, and institutional fund flows.​