In the past 24 hours, the price of Bitcoin (BTC) plummeted below $80,000, sparking concerns among investors. However, analysts believe that economic factors can pave the way for a powerful price surge. Bill Barhydt, CEO of Abra, referencing major economic trends, has raised the possibility of Bitcoin’s resurgence. He compared this correction to the 2017 cycle when fiat liquidity increase led to a significant rise in digital asset prices. Barhydt suggests that Donald Trump’s administration may implement policies like reducing Treasury bond rates to address the banking crisis and lowering mortgage loan rates to support the real estate market. These policies could inject more liquidity into the market and drive Bitcoin’s price growth. Barhydt also mentioned China’s economic issues, stating that they might further decrease interest rates in the U.S., strengthening global liquidity flow. Some prediction models suggest that if market conditions are favorable, Bitcoin could rise to $713,000 in the next 6 months. However, the recent Bitcoin price drop has resulted in heavy liquidations. For instance, Strategy’s assets, the world’s largest Bitcoin holder, decreased from $21.2 billion to around $17.3 billion. Barhydt emphasized that this correction is different from previous cycles. He believes that with increased liquidity and restored investor confidence, the digital currency market can quickly improve. Alongside economic factors, regulatory changes and U.S. government policies can also impact Bitcoin’s future. For example, Trump recently announced the creation of a Bitcoin strategic reserve, and the U.S. Securities and Exchange Commission (SEC) has taken a more friendly stance towards digital currencies. Overall, analysts believe that despite short-term fluctuations, a combination of economic stimuli, market’s historical resilience, and improved regulatory policies can pave the way for a strong and sustainable growth for Bitcoin in the near future.
