DATA & FIGURES
$76 a barrel for Brent crude oil, $64,317.98 for Bitcoin, +0.83% increase in Bitcoin price, 3.5% to 3.75% range for the benchmark Fed Funds rate, 178% expansion of the U.S.'s M2 money supply since January 2009
THE SCENARIO
The current geopolitical and economic context, including the Iran conflict and the Federal Reserve's monetary policy, is affecting the price of Bitcoin. The central bank's decision to keep the benchmark Fed Funds rate unchanged, within a range of 3.5% to 3.75%, at its last meeting in June, has contributed to the cryptocurrency's bear market.
DIRECT QUOTE
"Instead of getting caught up in short-term price targets, it's best to adopt a time horizon that looks out a decade or more into the future. With this perspective, the single most important data point investors should track is money supply, in my view." — Neil Patel, The Motley Fool
BBN INSIGHT
The Positive Side: The expansion of the U.S.'s M2 money supply by 178% since January 2009 provides Bitcoin with liquidity that can support a much higher price decades into the future. The Negative Side: The current bear market, coupled with the Federal Reserve's unaccommodating posture, is making it challenging for Bitcoin to recover. Investors are less inclined to allocate capital to high-risk assets like Bitcoin when the Federal Reserve is operating with tighter policy.
MARKET REACTION
Bitcoin price increased by +0.83% to $64,317.98, while other cryptocurrencies like Ethereum and XRP also saw increases of +2.03% and +0.94%, respectively.