Bitcoin (BTC) Relevance and Macroeconomic Boost, Here’s The Correlation

Legendary trader Raoul Pal took to X to explain the factors he believes are the most important chart in the macro market that crypto traders also need to take note of.

Debt And Devaluation Encourages Crypto Use

Pal identified some shortcomings on a macro scale of the United States market, citing that the aging population now equates to a low GDP. Consequently, this low GDP growth translates to high debt to service the aging population. The veteran trader identified this high debt and low GDP growth as areas the Federal government would need to pay attention to.

In his opinion, the “Fed needs to create liquidity to service the debt,” a trend that is best described as debasement. Failure to address the challenge would lead to the accumulation of more debts. It is worth noting that this market outlook could trigger the devaluation of the dollar.

I posted these the other day but I'm still not sure people yet understand them… and they are the MOST important charts in all of macro/crypto….

Aging population = lower GDP growth

Lower GDP = higher debt to service the aging population.

With high debt and low growth, the… pic.twitter.com/sbJszV1sDh

— Raoul Pal (@RaoulGMI) May 11, 2024

On the other hand, this unfortunate situation (for the dollar) may become the propeller that cryptocurrencies need to gain mainstream adoption. As it stands, many people already see Bitcoin as a viable hedge against economic crisis. A further plunge in the economic health status of the nation may push a larger number of people to find solace in the crypto sector.

Those who currently have crypto as an alternative investment option to traditional assets like bonds, stocks, or even gold may be protected against the potential devaluation of the dollar. CEO of Circle Jeremy Allaire once voiced this sentiment during an interview.

Jeremy Allaire and Larry Fink, CEO of Blackrock consider Bitcoin a vital component of a diversified investment portfolio in today’s complex geopolitical and economic landscape.

Opposition To the Role of Bitcoin

High-profile individuals like Peter Schiff, a recognized Bitcoin skeptic, do not think that crypto holds the capacity to serve as a hedge against devaluation and inflation. Schiff was recently featured in a live debate on YouTube sponsored by ZeroHedge.

Here, he pointed out that Bitcoin as a digital currency was not functional, and its slow speed and high transaction costs are obstacles to its daily use. SkyBridge Capital’s Anthony Scaramucci defended Bitcoin, stressing its fixed supply and the possibility of storing value for a long time.

Amidst these opposing arguments, BTC appears to be grabbing the attention of many investors including traditional financial institutions. This attention stems from the revelation that some of the top banking giants in the US now have exposure to spot Bitcoin ETFs. Wells Fargo and JPMorgan Chase are among the firms that have disclosed their Bitcoin exposures.

At the time of writing, Bitcoin has inked a mild recovery, up 0.7% in 24 hours to $61,066.36. Prior to this uptick, Bitcoin traded as low as $60,456.59 overnight.

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