Global economies are tepid. Nonetheless, many buyers still believe Bitcoin will become an economic North Star. Its price will reflect their confidence.

Regardless of any short-term pullback, Bitcoin will spend this year further cementing its reputation as digital gold. Indeed, just as it did in March 2023 during a narrowly avoided banking crisis, BTC will likely hold up in ways many traditional assets — perhaps even gold — fail to.

It is true that the grand institutional entry into Bitcoin has not lit up the markets as some might have hoped, and it probably won’t for a while yet. Much of this event was already baked into prices and there are few investors that saw the SEC's reluctant capitulation as any kind of ringing endorsement of cryptocurrency.

Nonetheless, BlackRock's ETF has already hoovered up $2 billion in assets as others follow fast in the rear, providing a level of support never before seen for the world’s biggest digital currency. The day is soon coming, infact, that we all reminisce about the good old days of BTC volatility.

In the meantime, though, we will almost certainly see a pullback in the face of global economic pressures. Chief among these is the resurgence of inflation in the US, which has dashed hopes for a rate cut before Q2, and which will likely continue to be exacerbated by rising tensions in the Middle East and an ongoing war in Europe.

On top of this, we have the end of the Bank Term Funding Program (BTFP) coming up on March 11. The saving grace of U.S. banks during last year’s almost-crisis, this may well reveal some further shaky foundations that could again spook markets into a significant sell-off.

Even more significant than all this, though, we have a growing global sovereign debt pile. Now standing at $91 trillion, this stone around the neck of global economies is continuing to put pressure on fiat currencies and bond markets all over the world, with the IMF increasingly citing concerns about public debt sustainability.

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Source - Coin Telegraph