The role of economic indicators in the assessment of bitcoin: a comprehensive analysis

In the world of finance, Cryptocurrency appeared as a new border for investors and analysts. With the rapid growth and the bigger adoption, Bitcoin (BTC) has become a hot topic between experts and enthusiasts alike. However, the assessment of Bitcoin value requires more than just a technical analysis. Economic indicators play a crucial role in evaluating general health and Bitcoin prospects, providing valuable information on its potential disadvantage and disadvantage.

What are the economic indicators?

Economic indicators are statistical measures that follow the economic activity and provide an image of the state of economy. These include indicators such as the GDP growth rate, inflation rates, job number, interest rates and commercial balances, among others. In the context of Bitcoin, these indicators can help identify the trends, cycles and models on the market.

The role of economic indicators in Bitcoin assessment

When it comes to evaluation of bitcoin, economic indicators offer a unique perspective on its performance. Here are some key ways by which indicators contribute to our understanding of BTC:

• The GDP growth rate:

  

  A strong GDP growth rate may indicate a robust economy with a high power for consumers, which is often associated with demand for digital assets such as Bitcoin.

• Inflation rate: Higher inflation rates can lead to higher interest rates and decrease in purchasing power, which makes it more attractive to invest in assets that offer protection similar to coverage against inflationary pressures.

• Employment numbers: Strong indicators of the job market, such as increasing unemployment rates or increasing the employment activity, can suggest a healthy economy, with high demand for goods and services, which is beneficial for the price of bitcoin.

• Interest rates: Low interest rates can make cheaper money loan and increase investments in assets such as actions and bonds, while high interest rates can decrease purchasing power and lead to market volatility.

• Commercial balances: A commercial deficit (increasing imports) or a commercial surplus (decreased exports) may indicate the economic power of a country and may have an impact on the value of Bitcoin.

Examples of economic indicators affecting Bitcoin

• The US GDP growth rate: In 2020, the US GDP growth rate accelerated to 2.3%, indicating a strong economy with high power for consumers.

• Inflation rates in the US: The inflation rate in the US increased from 1.7% in the fourth quarter 2019 to 5.2% in the fourth quarter 2020, which may indicate higher interest rates and decrease the purchasing power.

• US unemployment rate: A decrease in unemployment rates, such as a decrease from 6.8% in January 2020 to 4.7% in April 2021, indicates a strong labor market, with high demand for goods and services.

• Chinese commercial balance: The Chinese commercial balance has improved significantly from -40 billion in the second quarter of 2019 to $ 30.5 billion in 320 quarter, indicating increased exports and potential impact on Bitcoin prices.

Case Studies: Economic indicators affecting Bitcoin

• BTC/USD price graph (2020-2022):

* GDP growth rate was positive in the first half of 2020.

* The inflation rate decreased significantly from the fourth quarter of 2019 to the second quarter 2020, but then increased in T3 2020.

* The number of jobs showed a decrease in January and February 2021, followed by an increase later that year.

* Interest rates were decreased in the first half of 2020, with the rates to reduce the federal reserve in April 2020 to stimulate the economy.

• BTC/USD Price graph (2018-2020):

* The rate of GDP growth in the US was negative from T3 2019 to T4 2020, which indicates a weak economy and decreased purchasing power.

* Inflation rates increased significantly during this period, which leads to higher interest rates.

Conclusion

Economic indicators play a crucial role in evaluating Bitcoin value.