Categories: Blockchain Investments
Topics: Cryptocurrency

Bitcoin’s Resurgence: Navigating a Landscape of Growth Slowdown and Rising Inflation

In the midst of an economic environment characterized by slowing growth and accelerating inflation, Bitcoin has emerged as a standout performer, historically thriving under similar conditions. 

However, there's more to the Bitcoin story than just economic indicators; a myriad of factors is propelling the cryptocurrency's resurgence.

The Two Main Drivers:

Two key factors are steering the resurgence of Bitcoin, acting as key drivers that influence its trajectory.

1. Spot ETF Approval: A Game-Changer
   1. The long-awaited approval of spot ETFs for Bitcoin has finally materialized, transitioning from speculative whispers at the start of the year to full acceptance by the second or third quarter of 2023. 
   2. Major players like Blackrock (NYSE: BLK) and Fidelity (NYSE: FNF) are readying themselves for potential approval and launch dates, projected between January 5th and 10th. This development opens doors for Bitcoin to benefit from passive flows akin to traditional indexes and equities. Furthermore, approval could pave the way for a spot ETH ETF in the near future.
2. BTC as a Monetary Debasement Hedge 
   1. Bitcoin has taken on the role of a hedge against monetary debasement, aligning itself with gold. This trend intensified in the past six months amid escalating U.S. debt and deficits. Ideologically, Bitcoin remains a Fourth Turning anti-establishment and anti-institution position, serving as a hedge during periods of uncertainty.

Reinforcing Factors:

Several other factors are reinforcing and amplifying Bitcoin's strength in the current economic landscape.

1. Cycle Reset: Cleansing the Bad Actors 
   1. The cryptocurrency market has undergone a reset, with bad actors, scams, grift, leverage, and liquidations from the previous cycle now rinsed or jailed. This cleansing has resulted in a situation where there are fewer sellers in the market.
2. HODL Mentality: The Power of Holding 
   1. The "HODL" (Hold On for Dear Life) mentality has proven to be more than just a meme. Over 70% of Bitcoin supply hasn't moved in over a year, and more than 41% hasn't moved in over three years. Long-term holders have continued to accumulate, creating tight and coiled market conditions.
3. Resilience: Legitimacy Amidst Challenges 
   1. Bitcoin's legitimacy as a crypto asset has grown as it consistently achieves higher highs and higher lows in each cycle. Despite significant market volatility, Bitcoin's resilience is further solidified by the approval of a spot BTC ETF and increasing adoption in traditional finance.
4. Secular Trends: Beyond Market Dynamics 
   1. Adoption of cryptocurrencies and stablecoins in emerging markets is on the rise for practical reasons. Moreover, younger, digitally native generations already view BTC and digital assets favorably, setting the stage for progressive wealth control and asset allocation.

The Grand Finale: The Halving

All these factors converge on the same timeline as the canonical halving cycle, where new issuance is algorithmically cut in half. This event, consistently marking a hinge point in each cycle, aligns with the next halving date around April 17th, 2024. Investors and speculators remain intrigued by the halving cycle phenomenon, leaning into its potential until proven otherwise.

Bitcoin's resurgence in the face of economic challenges is a testament to its adaptability and growing acceptance in mainstream finance. With spot ETF approval, a robust HODL mentality, and favorable secular trends, Bitcoin appears well-positioned to navigate the intricate landscape of growth slowdown and inflation acceleration. As the next halving date approaches, the cryptocurrency market eagerly awaits to see if the historical patterns will once again hold true.

I’m betting that they will. We're now well on our way to our $1 million goal – up over 100% on multiple projects and this bull market has barely started! Don't miss out on the next wave. See a professional model portfolio now.

Keep coming back,

Chris Curl
Editor, Daily Profit Cycle