Bitcoin Weakens 9 Percent in a Week, US Economy Becomes a Booster

Liputan6.com, Jakarta Bitcoin’s downward trend continues, with the largest cryptocurrency currently trading at around USD 27,500 or the equivalent of IDR 411.2 million (assuming an exchange rate of IDR 14,953 per US dollar) down more than 9 percent in the past week, according to data from CoinGecko.

Reporting from Decrypt, Tuesday (25/4/2023), the decline in BTC erased Bitcoin’s initial April gain above USD 30,000 or the equivalent of IDR 448.6 million. Now Bitcoin is moving below the previous month’s closing value of around USD 28,500 or the equivalent of IDR 426.1 million.

Several other leading cryptocurrencies have also slipped over the past week, the majority of the top 10 cryptocurrencies by market cap.

Causes of Decline

A stronger US dollar is driving the losses, with the US central bank expected to raise its benchmark interest rate by another quarter basis point at its policy rate meeting next May.

A higher yielding dollar makes non-yielding assets like cryptocurrencies and gold less attractive.

Lately, Bitcoin has a stronger correlation with gold than stock market indices, according to data from the Valkyrie Fund. This was especially the case after the collapse of Silicon Valley Bank, which sparked concerns about banking failures.

Another factor that is reported to be developing in the American economy is the debt ceiling crisis. The US Department of the Treasury holds a historic amount of debt, the debt currently exceeds the USD 31.4 trillion debt limit, with approximately USD 31.46 trillion already taken out of loans.

The US Treasury Department’s debt ceiling is the maximum amount of debt that the US government can borrow to meet its financial obligations. Congress sets the debt ceiling, and a majority vote can change that.

While some Bitcoin proponents believe that the price of Bitcoin could increase if confidence in the American economy is shaken, the impulsive reaction of the global economic crisis has created a lot of uncertainty in the markets.

Disclaimer: Every investment decision is in the hands of the reader. Study and analyze before buying and selling Crypto. Liputan6.com is not responsible for profits and losses arising from investment decisions.

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