Bitcoin continues its upward trend as the global banking sector faces a crisis; the cryptocurrency has seen its best performance year to date. The BTC price has been pushing up due to a strengthening in the narratives and could see further upside ahead of a critical macroeconomic event.
As of this writing, Bitcoin (BTC) trades at $28,300 with sideways movement in the last 24 hours. The previous week, the cryptocurrency recorded a 17% profit, leading the bull run in the top 10 cryptocurrencies by market capitalization.
One Bitcoin, One Bet, One Macro Event
According to the trading desk QCP Capital, the Bitcoin price will likely remain upward. Tomorrow, the U.S. Federal Reserve’s (Fed) Federal Open Market Committee (FOMC) decision to hike or cut interest rates will tremendously impact Bitcoin and the global market.
Due to the current banking crisis, the FOMC and its takeaways could propel BTC higher while pushing other sectors to the downside. Unlike in previous occasions, QCP Capital believes that the Fed needs to “stick to their guns” and raise rates by the expected 25 basis points (bps).
Anything else, especially a cut in this metric, could spook the market and send the wrong message. If the Fed cuts or comes out “too dovish,” the market could be impacted by uncertainty disrupting BTC’s short-term bullish potential. QCP Capital noted:
Ironically our view is that the best thing the FOMC can do to calm markets is a business as usual approach – raising rates 25bp and keeping the dots (which implies 1 more hike sometime this year). (…) we hope Powell would stay the course next week rather than channel his best Arthur Burns flip-floppery – we all know what followed in the 1980s after that.
In addition, the trading desk referenced Balaji Srinivasan’s bet on Bitcoin, reaching $1 million in the next three months. The investor believes the U.S. economy is faltering, leading to hyperinflation in the dollar, pushing BTC into the $1 million level.
Balaji wagered $2 million that the cryptocurrency would hit this mark. The current banking crisis and how the Fed has dealt with it by injecting more liquidity into the system tips the economic balance in Bitcoin’s favor.
The cryptocurrency will likely not hit the $1 million level in 2023, let alone in 3 months, but the bullish thesis for BTC is gaining momentum. When banks crumble, Bitcoin soars. At least, this has been the message sent across the markets in the past two weeks. QCP Capital concluded:
This is a terrible precedent for future crises, where massive money printing will be the norm for generations to come. Perhaps seeing BTC hit $1m in this lifetime is possible after all.