In the intricate dance of global finance, traditional economic indicators and the burgeoning Bitcoin and crypto market are becoming increasingly intertwined. Recent macroeconomic data from the US suggests a cooling economy, and this could have profound implications for Bitcoin and other cryptocurrencies.
Macro Data Snapshot: A Cooling US Economy
Yesterday’s data release paint a clear picture of a slowing US economy:
- Job Openings: The July JOLTS report indicated a significant drop in job openings, falling to 8.827 million from the previous 9.165 million, and notably below the expected 9.5 million.
- US ADP Nonfarm Employment Change (August): Actual figures came in at 177K, missing the estimate of 195K and showing a sharp decline from the previous 324K.
- US GDP (QoQ) (Q2): The actual growth rate was 2.1%, slightly below the estimated 2.4% and just above the previous 2.0%.
- PCE Prices (Q2): The actual figure was 2.5%, marginally below the 2.6% estimate and a significant drop from the previous 4.1%.
- Core PCE Prices (Q2): The actual data showed 3.7%, just below the 3.8% estimate and down from the previous 4.9%.
- Real Consumer Spending (Q2): The actual figure was 1.7%, slightly above the 1.6% estimate and down from the previous 4.2%.
- Pending Home Sales (July): The month-on-month data showed an increase of 0.9%, defying the -0.60% estimate.
- Pending Home Sales Index (July): The index stood at 77.6, slightly above the previous 76.9.
Implications For Bitcoin And Crypto
The cooling US economy, as indicated by the recent macro data, might be setting the stage for a (last) significant surge in BTC and crypto prices before a recession. Why? Because bad news is good news for the currently short-sighted financial world. Bad data means that the US Federal Reserve will not raise interest rates further and that Quantitative Easing (QE) is getting closer. The long-term consequences in the form of a recession are being overlooked.
Joe Consorti, a renowned Bitcoin Layer analyst, highlighted the significant drop in job openings and the slowing job growth in August. He stated, “US job openings are at 8.827 million, the lowest level since September 2021. Worse yet – last month’s data was severely overestimated. Cracks are spreading in the labor market. Rate hikes’ impact finally hitting.”
He further emphasized the paradox of weak economic data driving stock market surges, suggesting, “Bad news is good news right now. Sour data relaxes…