Bitcoin has been struggling lately, but one economist thinks it’s about to bounce back. Alex Krüger, a well-known figure in the crypto world, says there are several things on the horizon that could send Bitcoin prices soaring again.
Why Bitcoin Might Be Down, But Not Out
Krüger acknowledges that Bitcoin is facing some headwinds right now. The German government and creditors from the collapsed Mt. Gox exchange are selling off their Bitcoin holdings, which is putting downward pressure on the price.
However, he believes these pressures are temporary and that Bitcoin is poised for a strong comeback by the end of the year.
Five Reasons for Optimism
Krüger outlines five key reasons why he’s bullish on Bitcoin:
- Soft Landing: The global economy is expected to avoid a major recession, which would be good news for risk assets like Bitcoin.
- Fed Rate Cuts: The Federal Reserve is likely to start lowering interest rates later this year, which could boost investor appetite for riskier assets.
- Crypto-Macro Correlation: As the German government and Mt. Gox creditors finish selling their Bitcoin, the price will be less affected by their actions, and the correlation between Bitcoin and traditional markets will strengthen.
- Trump’s Return: If Donald Trump wins the 2024 US presidential election, it could lead to more favorable regulations for cryptocurrencies.
- FTX Creditor Inflows: The FTX exchange is expected to start paying back its creditors in the fourth quarter of this year. If these creditors reinvest their funds into the crypto market, it could give Bitcoin a significant boost.
What to Expect in the Short Term
Krüger predicts that Bitcoin will trade around the $50,000 level for a while, but he sees potential for a rebound to the 200-day moving average (DMA) at $58,500.
While he acknowledges the possibility of further selling pressure from Mt. Gox creditors, he doesn’t see Bitcoin dropping significantly below $48,000.
Disclaimer
Remember, this is just one economist’s opinion. Investing in cryptocurrencies is risky, and you should always do your own research before making any investment decisions.
