There Are Two Conditions for Bitcoin to Remain Above $80,000

CoinShares stated that Bitcoin has exhibited increasingly gold-like price behavior over the past two weeks, and renewed concerns about the US fiscal sustainability have supported the rise in $BTC. According to the company, the US Treasury Department’s purchases of long-term government bonds and concerns about public debt have been instrumental in Bitcoin’s rise from lows of $60,000 to $80,100.

However, CoinShares added that the main constraint on Bitcoin’s rise remains the Fed’s monetary policy. The company assessed that for Bitcoin to achieve a sustained breakout above $80,000, one of two main scenarios might need to materialize.

In the first scenario, a resolution to the conflict with Iran would lead to a decline in oil prices and, consequently, inflation expectations. Such a development could reduce inflationary pressure on the Fed, creating a more supportive environment for risky assets.

The second scenario involves a further weakening of confidence in US government debt. According to CoinShares, deepening concerns about the sustainability of the US debt could lead investors to turn to non-governmental stores of value such as Bitcoin and gold, potentially strengthening demand for $BTC.

*This is not investment advice.