Is Bitcoin Really Becoming a Macro Asset?

[Dr.Bitcoin_Strange]

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Is Bitcoin becoming more and more economy dependent, or is it just a short term trend that won't impact its long term value promise?

Bitcoin is not a short term trend. You can say that about some of the altcoins that were created more than eight years ago but are no longer alive in today's market, they were trending at some point after being created. Bitcoin, however, has gone mainstream, and the reason is that the majority of investors have now identified it as a safe asset.

Some investors are risk conscious and need confirmation from others before deciding to invest in an asset, and you can see that with the U.S. Bitcoin ETFs. You would agree with me that there were many first time Bitcoin investors who had never invested in Bitcoin before but, because of the ETFs, they believe that it is much safer to invest. Meanwhile, they could have invested in Bitcoin on their own even before the ETFs and would have made more profit.

Bitcoin is now an asset of interest to many people around the world. It's not just institutions that hold large amounts of Bitcoin, some governments do too.

[Iranus]

Bitcoin is originally designed as a decentralized currency, so I don't think it will be more economically dependent and act the same thing like fiat which is heavily dependent on public trust and government authority. Maybe we are seeing somehow that bitcoin is slowly getting affected by what's happening globally, but what we are seeing are just temporary impacts, not actually permanent effects.

Bitcoin is decentralized and of course, it's different from fiat. However, at the end of the day, it's still just a part of the global economy and financial market.

No matter how decentralized Bitcoin is designed to be, the people who hold and trade it are still human. And we're still affected by interest rates, liquidity, market sentiment...So like any other asset, the impact of the economy on Bitcoin isn't just temporary.

However, there is no certainty with bitcoin. It can be fully decentralized by now but possible changes are probably welcome especially if it seeks the long-term interest for bitcoin, not just as a currency, a commodity, but also as a store of value.

What changes are you referring to? The purpose and use cases of Bitcoin may change over time and depending on people's needs. But I'm certain that its decentralized nature will never change.

[Solokan]

Is Bitcoin becoming more and more economy dependent, or is it just a short term trend that won't impact its long term value promise?

This is not a sign of a change in the fundamental nature of Bitcoin, but rather a natural consequence of its widespread acceptance. Now that large institutions and public companies are in the market, news such as major company earnings reports will have an impact on the price in the short term but I don't think that the future of Bitcoin depends on central bank decisions.  To me the real power of Bitcoin is still in the same place. I see fluctuations in fiat prices or macro events, but I don't give them more importance than the main purpose of Bitcoin.

I also believe BTC will remain on the same fundamentals. Essentially, it will be in a safe position, although its price is currently influenced by these factors. However, I believe this is only temporary, as it appears BTC will have even greater potential in the future. I don't think there's any need to worry about BTC, as even though it's currently in a macro phase, those who hold BTC for the long term will likely still profit from their investment.

Given that BTC is not regulated by banks or governments, it will be difficult for it to fall. Therefore, I believe BTC is still safe, and it seems Satoshi's goal has great potential to be realized in the future.

[Numan467]

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Is Bitcoin becoming more and more economy dependent, or is it just a short term trend that won't impact its long term value promise?

Bitcoin is not a short term trend. You can say that about some of the altcoins that were created more than eight years ago but are no longer alive in today's market, they were trending at some point after being created. Bitcoin, however, has gone mainstream, and the reason is that the majority of investors have now identified it as a safe asset.

Some investors are risk conscious and need confirmation from others before deciding to invest in an asset, and you can see that with the U.S. Bitcoin ETFs. You would agree with me that there were many first time Bitcoin investors who had never invested in Bitcoin before but, because of the ETFs, they believe that it is much safer to invest. Meanwhile, they could have invested in Bitcoin on their own even before the ETFs and would have made more profit.

Bitcoin is now an asset of interest to many people around the world. It's not just institutions that hold large amounts of Bitcoin, some governments do too.

I completely agree that Bitcoin is not going to be short term trend anymore. My question was more why it is valued the way it is right now and not whether Bitcoin has any value at all.

Flow of institutional money and ETFs has certainly helped in giving confidence, but it has also made large economic events such as interest rate decisions much more important on short term price movement side of things. While Bitcoin's long term core strengths remain unchanged, that is what I find interesting is how it has changed.

[Doll2233]

I think Bitcoin's financial security, globalization system, and method of staying safe from inflation are more important than the price rise in Bitcoin!

Yes, the fundamentals of Bitcoin are what matter, but don't throw words like globalization system because you are ignoring the fact how the market actually works. Bitcoin's price is dependent on traditional macroeconomics and central banks. Back then, Bitcoin was created to replace traditional banks, but now etfs etc. Bitcoin system is completely independent, but its fiat price completely depends on the traditional one. Bitcoin protects against inflation over a multi-year period, but its current price action is entirely chained to traditional economics.

[Taricoins]

Like alot of people have already said, the answer is absolutely YES, like other macro assets, the key indicators that proves that to be a macro assets is its globalization and no one can argue with that. One of the biggest quality that poses Bitcoin to be a macro asset is its ability to remain profitable even in times of micro financial shifts, plus it's huge market size and enormous trading volumes per day ensures big financial institutes to take postions. At this point in time, alot of big financial institutions have already laid down the fact that Bitcoin had attain such heights

[Rgram]

As much as many don't like it, it seems there's no getting away with it. This has become Bitcoin's fate ever since its price attracted supporters more than its technology.

That’s the scary part that has become a part of its reality as at today. Its price attracts supporters than the technology on which it’s built. Of course there has being a number of technologies that adopt systems operated by Bitcoin like, the use of blockchain for storing data but, people are more inclined to Bitcoin’s pricing than what Bitcoin represent.

It always creates a course for wonder what happens if they all cash in. The market would suck it up in time though but, for how long and where would that leave regular or holders of small volume.

It’s not difficult though to recognize how Bitcoin have grown, with the government trying to leverage on it for something as important as a reserve tells a lot.

[Zlantann]

I completely agree that Bitcoin is not going to be short term trend anymore. My question was more why it is valued the way it is right now and not whether Bitcoin has any value at all.

Flow of institutional money and ETFs has certainly helped in giving confidence, but it has also made large economic events such as interest rate decisions much more important on short term price movement side of things. While Bitcoin's long term core strengths remain unchanged, that is what I find interesting is how it has changed.

Bitcoin is a currency or asset and can be adopted or used by people the way they want. Traders will always use Bitcoin as a short-term asset since they want quick profit. While hodlers perceive Bitcoin as a long-term asset.

The price of Bitcoin is determined by the law of demand and supply. The approval of ETFs increased the amount of Bitcoin held by centralized platforms. This has given them some level of influence since inflows and outflows affect the market. In the future, countries setting up Bitcoin reserves could change how the market moves. It is important to note that interest rates are an important economic indicator that affects every part of the economy, including the crypto industry.

[Natalim]

As much as many don't like it, it seems there's no getting away with it. This has become Bitcoin's fate ever since its price attracted supporters more than its technology.

That’s the scary part that has become a part of its reality as at today. Its price attracts supporters than the technology on which it’s built. Of course there has being a number of technologies that adopt systems operated by Bitcoin like, the use of blockchain for storing data but, people are more inclined to Bitcoin’s pricing than what Bitcoin represent.

It always creates a course for wonder what happens if they all cash in. The market would suck it up in time though but, for how long and where would that leave regular or holders of small volume.

It’s not difficult though to recognize how Bitcoin have grown, with the government trying to leverage on it for something as important as a reserve tells a lot.

Bitcoin is getting more like a macro asset, and clearly we can all agree with that. I guess that's how attractive bitcoin is, that even the whole country's significant news and events contribute to how bitcoin price moves. Although the impact seems temporary, but its happening again and again, so clearly bitcoin is no longer an investment asset nor a currency, but it also acts a macro asset no matter what or where angles we will try to look at it.

The good thing is, bitcoin remains following a constructive price pattern, no matter how sometimes unfavorable the global condition is.