Imagine you’re on a rollercoaster: one minute you’re up high, enjoying the view, and the next minute you’re plummeting down. That’s pretty much how the financial market works, especially with things like Bitcoin and cryptocurrencies. It sounds fun, but it can also give you butterflies in your stomach.
This week promises to be a quieter one (phew!), with no major economic data to shake up the market. But be careful: on December 26, the US will release unemployment claims. Why does this matter? Well, these numbers can give clues about how the economy is doing, and cryptos – especially Bitcoin – are like those people who react to every little thing.
This week promises to be a quieter one (phew!), with no major economic data to shake up the market. But be careful: on December 26, the US will release unemployment claims. Why does this matter? Well, these numbers can give clues about how the economy is doing, and cryptos – especially Bitcoin – are like those people who react to every little thing.
Now, think of the Federal Reserve, the US central bank, as a DJ who controls the music at the party (interest rates). It recently “tightened the tempo” by cutting interest rates by 0.25%. But at the same time, it warned that by 2025 the music might get louder again. As a result, people who invest in risky things like Bitcoin have pulled back.
And there's more: remember that roller coaster analogy?
One expert compared the price of Bitcoin to the supply of money in the world. When there is enough money in circulation, Bitcoin goes up. When it slows down, it goes down. And guess what? In the last two months, the world has lost $4.1 trillion of this "circulating money." That would be like a rollercoaster losing momentum – and Bitcoin could fall sharply, as low as $20,000, according to some predictions.
So, the question remains: do you think it's better to wait for the roller coaster to stop or take advantage of the descents to make good choices?