Bitcoin surged to almost $30,000 late Tuesday after MicroStrategy reported second quarter results and said it might buy even more of the digital asset. But downside pressure amid continued uncertainty about macroeconomic fundamentals sent it falling again on Wednesday.
The world's largest digital asset by market capitalization fell 2.4% from its peak last night to $29,262 at 12:42 p.m. ET, according to CoinGecko. It had rallied as much as 3.7% on Tuesday amid the news from MicroStrategy.
A number of financial experts are growing more confident about the state of the U.S. economy. "Inflation data has improved and key economic data points like GDP growth, consumer spending, and job creation have been stronger than expected," U.S. Chamber of Commerce economist Curtis Dubay said in a note on Wednesday.
But even as some say a so-called "soft-landing" could be good for digital assets, other analysts pained a more complicated picture.
Robust economic readings
Co-founder of Sei Labs Jeff Feng said robust economic readings "could reaffirm confidence in traditional markets, potentially causing some shift away from riskier assets, such as bitcoin."
Michael Dunn of Bitnomial Exchange concurred with this forecast, stating that "U.S. economic activity might propel the Federal Reserve’s drive towards elevated interest rates and constricted credit, applying downward pressure on bitcoin’s potential for price appreciation."
However, Dunn stressed bitcoin’s fixed-supply mechanics coupled with robust economic incentives around the Bitcoin network make it resilient to most major macro-economic events.
"It’s known as the ‘gold standard’ in the crypto-community and demands the attention of institutional investors aiming for a diverse risk portfolio," Dunn told The Block.
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