U.S. economy outperforms as Q2 GDP growth exceeds early reports
Share link:In this post: The U.S. economy grew faster than expected in Q2, but with mixed effects on Bitcoin. Stronger GDP growth means the Fed might not cut interest rates soon. Bitcoin’s price has retraced back to its previous range, facing key support around $56,000.
The U.S. economy pulled a surprise move in Q2, with GDP growth getting revised up to 3.0% from the earlier estimate of 2.8%. That’s a big deal because it means the economy is doing better than most people thought. Maybe the economy is definitely dodging a recession.
But here’s the thing. With this sort of GDP growth, the Federal Reserve might hold back on cutting interest rates. High rates mean borrowing costs more, so there’s less easy money flowing around to pump into risky assets like Bitcoin.
GDP growth rate Q2 ⏐ Source: cryptoslate.comA lot of people already expected the Fed to slow down on rate cuts, and Bitcoin’s 5.2% jump after the initial GDP numbers might have been a classic “buy the rumor, sell the news” situation.
We also saw the GDP deflator, a measure of inflation, tick up from 2.3% to 2.5%. Not huge, but it’s there. For Bitcoin, more inflation can make it look attractive as a hedge against the dollar losing value.
On the other hand, if inflation isn’t too wild, the Fed probably won’t be slashing rates anytime soon. So, Bitcoin is kind of stuck in the middle, waiting to see what happens next.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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