Why is bitcoin pumping when the economy is heading into a recession?

[kryptqnick]

There's no reason why the 2021 bull run should be considered the last. When Bitcoin went down in 2018, many people claimed it'll never go back to $20k, and just a few years later $30k is considered not such a great price.
The question of the relationship between Bitcoin and the traditional economy is complex. When a major negative event happens, Bitcoin can go down with the rest of the market. But it can also recover faster than other areas and even go into the bull market when the rest of the economy isn't doing great.
It's still unclear whether the economy is already recovering or just heading deeper into recession, but Bitcoin is simply independent of these processes. So it can go up or down, regardless of where the global economy is generally at.

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[Franctoshi]

One of the reasons why Bitcoin was created is because of the inflation hedge, so in such a time like this when the economy is heading towards recession, investors will run for safety, and Bitcoin, Gold, and real estate stand to benefit; there will investors be running to invest their money. Bitcoin in the past has proven to be a store of value when you compare its performance over a couple of years with other Assets.

[Dr.Bitcoin_Strange]

OP, The Bitcoin price hike is never measured just by one factor; there are several factors that contribute to the price movement of Bitcoin, and for this current uptrend, I don't think any have been identified as the serious cause, and there is still some possibility that the price could drop or keep trading high. Some people believe that the whales are the only ones responsible for pulling the market up or down. The whales are the heavy investors who buy huge amounts of Bitcoin, and any time they buy huge amounts of Bitcoin, the price is likely to rise, and any time they sell off a huge amount of Bitcoin, the market drops too. So, despite the state of the economic system, there are big players in the crypto industry who still have a huge amount to invest in Bitcoin and also sell it off when the price becomes favorable for their investment.

[serjent05]

Forgive my ignorance, I am very new to this space. I saw talks about CBDCs and that drew my attention back to cryptocurrencies. I thought the last bull run would be the last we would have seen of bitcoin ever reaching those heights so I stopped looking at the crypto space ever since. But now we have discussions about dethroning the dollar and CBDCs, I am changing my mind about that, but I still find it fascinating that bitcoin is pumping in this economy right now. I am no means an expert in economics as you can clearly tell, would appreciate if anyone who had the knowledge could shed some light here. Always keen to learn. Thanks

Bitcoin market moves through supply and demand, but sometimes through manipulation of powerful organizations that have either funds or authority.  The current uptrend movement of Bitcoin is due to the positive sentiment created by the recent news about Bitcoin ETF  being more likely to be approved by SEC.  With the news, many investors jump into the Bitcoin investment so that they don't missed out.

[Wakate]

The question we need to ask ourselves is whether Bitcoin has any business with any country's economy? No!
Anything that happens to a country does not have anything to do with Bitcoin so we don't have to be blaming Bitcoin for something like this.
Inflation is one of the things that could affect a country economy which could restrain investors from coming to invest in such economy. When there less outflows of exportation, the value of a particular currency will reduce because that could halt the availability of dollar inflow. Bitcoin is not a universal currency and does not determine the price or standard of a country economy.

[gunhell16]

Forgive my ignorance, I am very new to this space. I saw talks about CBDCs and that drew my attention back to cryptocurrencies. I thought the last bull run would be the last we would have seen of bitcoin ever reaching those heights so I stopped looking at the crypto space ever since. But now we have discussions about dethroning the dollar and CBDCs, I am changing my mind about that, but I still find it fascinating that bitcoin is pumping in this economy right now. I am no means an expert in economics as you can clearly tell, would appreciate if anyone who had the knowledge could shed some light here. Always keen to learn. Thanks

Probably, these things are happening because the Bitcoin Halving is approaching next year. We don't know if they did it on purpose or maybe they are actually preparing for the upcoming bull run next year.

Because if you notice that recently there are companies that have been closely related to Bitcoin or cryptocurrency and just a few days ago the SEC government also allowed new companies to register that are still related to crypto or bitcoin. Why is it? that's the question...

[justdimin]

I guess by now we have the answer, despite where the economy is heading or if we are in a recession, the bitcoin market doesn't care. What investors did is to pump it hard because of the BlackRock news and it seems it has somewhat remain above $30k at the end of this month when everyone thought that June might be negative again.

So again, whatever happens to the global economy, if it goes worst, then bitcoin could be a hedge against recession as it will be seen as a store of value. Just like what happen in the pandemic in 2020, although we have the Covid-19 scare, still the price pumps so hard till 2021.

Bitcoin despite being known to be decentralized, I think it is still like the other financial market where it can be affected by the economic issues. I know recession is where a company is having a hard time so they remove some workers. Can be for temporary or permanent. People and companies have less money in hand to buy a Bitcoin so Bitcoin is supposed to fall down but it is surprising if it isn't.

Maybe there are other positive events which counter the recession. Haven't heard of the BlackRock news lately but I only heard that Microstrategy is buying more Bitcoins. This could be one of our lead. BTC is known to be a hedge but people shouldn't wait for the darkest time before they invest because they will likely fail.

[khiholangkang]

OP, The Bitcoin price hike is never measured just by one factor; there are several factors that contribute to the price movement of Bitcoin, and for this current uptrend, I don't think any have been identified as the serious cause, and there is still some possibility that the price could drop or keep trading high. Some people believe that the whales are the only ones responsible for pulling the market up or down. The whales are the heavy investors who buy huge amounts of Bitcoin, and any time they buy huge amounts of Bitcoin, the price is likely to rise, and any time they sell off a huge amount of Bitcoin, the market drops too. So, despite the state of the economic system, there are big players in the crypto industry who still have a huge amount to invest in Bitcoin and also sell it off when the price becomes favorable for their investment.

And yes, I agree with you that the increase in bitcoin cannot be seen from one factor, what happened to Bitcoin today because he found positive sentiments and market saturation due to prolonged side way, maybe Awhale had power to move prices, but also whale Alone and those Whale compete in trade, I do not see the line from there, but maybe that is one of the factors that can boost the price of Bitcoin.

I thought before that the recession would not happen, at least I thought it was delayed because if seen from the global economy at this time it began to improve and did not have the potential for recession, so I think the increase in Bitcoin prices is reasonable because the fear of recession has faded. IMO

[ElmedoRator]

Forgive my ignorance, I am very new to this space. I saw talks about CBDCs and that drew my attention back to cryptocurrencies. I thought the last bull run would be the last we would have seen of bitcoin ever reaching those heights so I stopped looking at the crypto space ever since. But now we have discussions about dethroning the dollar and CBDCs, I am changing my mind about that, but I still find it fascinating that bitcoin is pumping in this economy right now. I am no means an expert in economics as you can clearly tell, would appreciate if anyone who had the knowledge could shed some light here. Always keen to learn. Thanks

Regarding Bitcoin's price increase and related peaks, the value of Bitcoin and other cryptocurrencies can vary wildly due to many factors, including demand from investors and users, news and related information, and even the general financial market. So it is not certain that the last bull run will be the last time we see Bitcoin reaching all-time highs. The cryptocurrency market is still very dynamic, and the value of cryptocurrencies can change over time. The fact that cryptocurrencies like Bitcoin "pump" into the economy is a dual aspect. Some argue that widespread adoption of Bitcoin and other cryptocurrencies could bring benefits such as increased online payments and financial freedom for everyone. However, there are also concerns about price volatility, money laundering, and illegal activity related to cryptocurrencies.

CBDC dethroning the dollar entirely could be challenging and depends on the boom and widespread adoption of CBDCs in the financial services and user communities. Countries need to consider important factors such as the safety, security and stability of CBDCs before it can be fully adopted.

[Gyfts]

Not even the institutional guys know where the economy is actually heading. There was a large likelihood of recession in '22 Q4, and in Q1 '23, and there hasn't been a technical recession. I wouldn't be so quick to say that we're reading into a recession even though it's the speculative notion. Best way to describe the economy now is uncertainty. Perhaps a lot of the institutional guys don't know where to put their funds and pooling their resources into crypto to ride out a recession in case one does actually happen but that's as speculative as the recession talk.

Who knows?

[ultrloa]

I guess by now we have the answer, despite where the economy is heading or if we are in a recession, the bitcoin market doesn't care. What investors did is to pump it hard because of the BlackRock news and it seems it has somewhat remain above $30k at the end of this month when everyone thought that June might be negative again.

So again, whatever happens to the global economy, if it goes worst, then bitcoin could be a hedge against recession as it will be seen as a store of value. Just like what happen in the pandemic in 2020, although we have the Covid-19 scare, still the price pumps so hard till 2021.

People and companies have less money in hand to buy a Bitcoin so Bitcoin is supposed to fall down but it is surprising if it isn't.

Surprisingly the fall of bitcoin they feared off didn't happen since many when the time recession happen many people find a opportunity to gain some money and to many people see a potential with bitcoin. It gain hype at that time this is the reason why we see it surviving even if there's ongoing crisis happened. Bitcoin performance change some perspective that's why we see this industry keep growing and many new people slowly gaining interest to try this for theirselves.

[buwaytress]

Not even the institutional guys know where the economy is actually heading. There was a large likelihood of recession in '22 Q4, and in Q1 '23, and there hasn't been a technical recession. I wouldn't be so quick to say that we're reading into a recession even though it's the speculative notion. Best way to describe the economy now is uncertainty. Perhaps a lot of the institutional guys don't know where to put their funds and pooling their resources into crypto to ride out a recession in case one does actually happen but that's as speculative as the recession talk.

Who knows?

The institutional guys rely on advisors, just like everyone else. In fact, those who listen to the best advice, from as diverse and as many advisors they can afford, and then hedge all over with different advise, generally do the best.

Institutionals who think they can rely on their genius (aka luck) generally end up gambling, and losing.

See FTX and the cohort of 2022 Chapter 11s (and equivalents).

[Mauser]

Forgive my ignorance, I am very new to this space. I saw talks about CBDCs and that drew my attention back to cryptocurrencies. I thought the last bull run would be the last we would have seen of bitcoin ever reaching those heights so I stopped looking at the crypto space ever since. But now we have discussions about dethroning the dollar and CBDCs, I am changing my mind about that, but I still find it fascinating that bitcoin is pumping in this economy right now. I am no means an expert in economics as you can clearly tell, would appreciate if anyone who had the knowledge could shed some light here. Always keen to learn. Thanks

The thing with financial markets is that they are always forward looking, so being in a recession right now is not really affecting the prices of financial assets that much as long as the outlook for the future is strong. When the war in Ukraine started the world looked doomed at first and the outlook was very bad, leading to recessions in many countries due to the high energy prices and rising inflation. But now we are 1.5 years later and world is getting back to normal, people are relieved that the worst is behind us and will focus on the future. It is not only crypto currencies that are doing well, the big stock indices are all up this year too. On one side the economic might not look so good as it did 3 years ago, but with high inflation people need to invest their money somewhere. It's not really a option to leave our money in the savings account with 2-3% interest rate when the inflation rate is at 7-10%. So don't worry too much about the state of the economy in the first 6 month of the year, rather at the outlook for the next 6 month.

[Ozero]

Not even the institutional guys know where the economy is actually heading. There was a large likelihood of recession in '22 Q4, and in Q1 '23, and there hasn't been a technical recession. I wouldn't be so quick to say that we're reading into a recession even though it's the speculative notion. Best way to describe the economy now is uncertainty. Perhaps a lot of the institutional guys don't know where to put their funds and pooling their resources into crypto to ride out a recession in case one does actually happen but that's as speculative as the recession talk.

Who knows?

In general, it is generally accepted that bitcoin was invented as an alternative to the current financial system, including as a protection against periodic economic crises. So when nation-state money is in trouble and inflation rises, bitcoin and other top cryptocurrencies tend to rise in value as people bail out of fiat inflation and put their savings into cryptocurrencies. But in these difficult times, it is not so pronounced, because the price of cryptocurrency is influenced by other factors happening in the world.
At the same time, it is unlikely that the price of bitcoin and other cryptocurrencies will grow strongly, because in the second half of the summer there is usually a seasonal price decline. But cryptocurrency often surprises us.

[Merit.s]

It is normal for the price of bitcoin to move  up,no matter whatever challenge that bitcoin is facing. The halving is drawing near and there will be a pump in the price gradually so that it will hit a significant amount after the halving. The last bull run will never be the last bull run and we still have more bull run after that of 2025, because bitcoin price movement is cyclic and repeats itself after every four years based on history. Investors who has this knowledge always use it as advantage to make good profit. They buy when the price is dip and hodli till the bull run comes again before selling off some fractions or all of it.
OP, it is better that you think on investing than thinking that bitcoin price will remain bearish. Take advantage of the market now because we this might be the lowest price that you can buy bitcoin till after the next bull run coming up 2025.

[davis196]

Forgive my ignorance, I am very new to this space. I saw talks about CBDCs and that drew my attention back to cryptocurrencies. I thought the last bull run would be the last we would have seen of bitcoin ever reaching those heights so I stopped looking at the crypto space ever since. But now we have discussions about dethroning the dollar and CBDCs, I am changing my mind about that, but I still find it fascinating that bitcoin is pumping in this economy right now. I am no means an expert in economics as you can clearly tell, would appreciate if anyone who had the knowledge could shed some light here. Always keen to learn. Thanks

Who said that the Bitcoin price is pumping? The current price is moving in the 25K-30K range. This isn't a price pump or a bull run. It's a pretty much normal price volatility. There were some bullish news about the Binance/Coinbase vs. SEC lawsuit, which helped the price to go from 25K to 30K. I don't expect a major price pump to 40-50K USD anytime soon. Maybe it will happen by the end of 2024 or the first quarter of 2025.
The crypto world is still relatively small compared to the global economy and the financial markets. It's theoretically possible for the Bitcoin price to grow in times of recession.
And by the way, the expectations of a massive global recession might be exaggerated.

[asrinur]

I think, the reason why Bitcoin can increase in price during a recession is because it is considered as a safe haven asset, an investment alternative, a protection against economic uncertainty, and can attract speculative interest. However, the crypto market, including Bitcoin, is highly volatile, and there is no guarantee that Bitcoin will always see a price increase during a recession.

[bestcoins1]

I think, the reason why Bitcoin can increase in price during a recession is because it is considered as a safe haven asset, an investment alternative, a protection against economic uncertainty, and can attract speculative interest. However, the crypto market, including Bitcoin, is highly volatile, and there is no guarantee that Bitcoin will always see a price increase during a recession.

Fluctuations occur due to the presence of buyers and sellers in the market and this always causes a decrease and increase in the price of Bitcoin based on demand and supply that always occurs at all times on Bitcoin. That is undeniable by many, but because Bitcoin has been such a fine asset over the years in the crypto space. So most people at this time still make Bitcoin a good investment and also an asset that is very well known among cryptocurrency enthusiasts around the world.

[woez]

But now we have discussions about dethroning the dollar and CBDCs, I am changing my mind about that, but I still find it fascinating that bitcoin is pumping in this economy right now. I am no means an expert in economics as you can clearly tell, would appreciate if anyone who had the knowledge could shed some light here. Always keen to learn. Thanks

For now I see that many investors, institutions and people are looking at BTC and have the belief that Bitcoin has the potential to reshape the financial landscape especially at this time and another good thing is that BTC also provides financial inclusion for those who do not have access to the traditional banking system. My assumption, the dollar is still there and it won't just disappear for no apparent reason.

[savetheFORUM]

One of the reasons why Bitcoin was created is because of the inflation hedge, so in such a time like this when the economy is heading towards recession, investors will run for safety, and Bitcoin, Gold, and real estate stand to benefit; there will investors be running to invest their money. Bitcoin in the past has proven to be a store of value when you compare its performance over a couple of years with other Assets.

I don't really think Bitcoin was actually created to be a hedge against inflation because there wasn't inflation of this level at the time Bitcoin was created. It was created to be an alternative payment system and a store of wealth, but mainly to be a way for people to exchange finances without any central authorities, delays, and any kind of surveillance and stuff, though it is nowadays taken as an investment asset, it wasn't created to be like this.

Satoshi knew that Bitcoin and blockchain technology will either fail miserably or will gain significant success in the future, but I'm not really sure if he expected this much success for Bitcoin to conquer the whole world and become one of the most widely used investment opportunities in the globe.