A perfect storm is brewing that could drive up Bitcoin (BTC) prices. Apart from the success of its spot Bitcoin exchange-traded funds (ETFs) and the looming halving, the current state of affairs in the US economy and politics could add up to the catalysts.
Bleak Outlook in the US Economy
Nobody describes the trajectory of the US economy better than JPMorgan CEO Jamie Dimon. Yes, it’s the same guy who said he would shut down Bitcoin if he were the government. His recent statements against the administration could turn out to be just the tool we need to poke the crypto bulls.
“It is a cliff, we see the cliff,” he was quoted saying in an interview. “It’s about 10 years out, we’re going 60 miles an hour [toward it].”
Dimon’s remarks were made in reference to the nation’s ballooning debt, which puts the debt-to-GDP ratio above 100%. The JPMorgan head honcho projects it could get worse by 2035 when it pops to 130%.
“And it’s a hockey stick,” he describes the shape of the trend on a chart. He warns that when the “hockey stick” comes into effect it will go downhill from there.
The JPMorgan boss echoes the same sentiments aired by economists as the US Congress and White House have incessantly increased their spending. As of the latest report of Fox Business, the national debt has already surpassed $34 trillion. This is by far the highest level it achieved throughout history.
Political Stir Up
Former President Donald Trump’s campaign is going full swing even though we’re still 10 months away until the next US presidential election. By now, it’s clear that he wants to undo what his successor did in his four-year term.
One of the new armaments in his vendetta is his strong stance against central bank digital currencies (CBDCs). For him, these instruments pose a “dangerous threat to freedom” because they can be utilized by the government to control peoples’ finances.
During his presidency, Trump stated that he is not a fan of Bitcoin and other crypto because he does not consider them as money. He also thinks their value is “highly volatile and based on thin air” and they can be employed to facilitate illegal activities.
Fast-forward to the present, even though he has not directly endorsed Bitcoin and cryptocurrencies, he has shown strong support for these digital assets through his various non-fungible token (NFT) projects. He is also a known holder of altcoins and even meme coins.
With a leading presidential candidate having exposure to cryptocurrencies, the prospects of Trump making better calls in the regulation of these digital assets — should he win the coming election — is not far from realization.
Final Thoughts
All these could help fuel the narrative that has encapsulated the very fabric of Bitcoin, and that’s its primary purpose as a hedge against economic and political uncertainties akin to gold. The ongoing success of Bitcoin ETFs and the looming scarcity of BTC after April’s halving could also provide the ideal recipe for an all-new stampede by the bulls.