Bitcoin drops 13% due to U.S. recession fears, but Bernstein sees potential with rate cuts.

From Investing.com

August 6, 2024 10:07 AM:

Bitcoin experienced a 13% drop over the weekend due to U.S. recession fears and Yen market dislocation. Bernstein analysts expect this reaction as Bitcoin is seen as a ‘risk off’ asset, like during the March 2020 flash crash. They believe if rate cuts occur, hard assets like Bitcoin could see a price increase.

With Bitcoin ETFs now live and highly liquid, trading approximately $2 billion per day, Bernstein sees investing in Bitcoin becoming easier. They highlight Bitcoin’s association with political dynamics, being considered a ‘Trump trade’ by the crypto market. They expect Bitcoin to trade range-bound until the U.S. elections.

Despite significant ETF inflows of almost $1.2 billion in two weeks, Bernstein notes outflows from Grayscale’s ETHE have offset gains. They anticipate the Bitcoin and crypto markets to trade based on macro and election cues for most of Q3 2024, suggesting investors consider adding Bitcoin or Bitcoin equities for exposure to a ‘Trump trade’. If broader equity markets recover due to a Fed response, Bernstein expects Bitcoin and crypto markets to follow suit.

Read more at Investing.com: Despite selloff, Bitcoin remains a ‘Trump trade’: Bernstein By Investing.com