However, it was noted that liquidity concerns have eased as the timeframe for Strategy to raise funds for dividend payments has been extended to approximately 10 months.
Nevertheless, the overall outlook for risky assets like Bitcoin remains mixed. Therefore, Bitcoin and the cryptocurrency market are expected to continue trading sideways for now.
According to QCP, ongoing macroeconomic uncertainties, such as tensions between the US and Iran, continuing market concerns regarding MicroStrategy’s STRC perpetual preferred stock issuance, and the hawkish stance of the new Fed Chairman Kevin Warsh, are negatively impacting investor sentiment.
Finally, the firm analyzed that Bitcoin needs a combination of positive macroeconomic headwinds and a catalyst from within the crypto market to break out of its boring sideways trend and begin to rise.
Aside from QCP Capital, BIT (formerly Matrixport) stated that macroeconomic factors, not the rise in AI stocks, triggered the Bitcoin correction.
In its latest report, BIT argued that the recent correction in Bitcoin was due to macroeconomic factors, not capital inflows into AI-related stocks.
The company stated that the temporary divergence between Bitcoin and the US Software ETF (IGV) may have stemmed from the closing of short positions, noting that the IGV has since experienced a further significant decline.
The report stated that although the two entities have different business structures, they are both sensitive to the same macroeconomic variables, including the liquidity environment, interest rate outlook, and investor sentiment.
*This is not investment advice.
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