Researchers say macroeconomic slowdown may be beneficial to Bitcoin and FAANG stocks

Researchers say macroeconomic slowdown may be beneficial to Bitcoin and FAANG stocks


Since the beginning of the bear market in 2018, investors have been trying to determine when the Bitcoin (BTC) market will be revived again. Industry research firm Delphi Digital said that while many experts believe that digital assets are independent of traditional financial systems, the strong (or weak) macroeconomics may have a positive impact on the future development of the cryptocurrency market.

Bitcoin may attract investors seeking "high yields"

According to a recent report by a New York-based research organization, the potential growth of a growth investment strategy (investing in growth companies to maximize capital gains) may help Bitcoin in the coming months and years. Achieve price increases. Delphi analysts explain that growth-centric investors' favorite choices typically include stock combinations of FAANG (Facebook, Amazon, Apple, Netflix, and Google) and other popular Silicon Valley companies.

However, given the market outlook for slowing economic growth and lower earnings forecasts, the current context appears to be beneficial to investment by growth companies. If this is the case, Bitcoin may be sought after as investors buy high-risk assets with significant appreciation potential.


– Delphi Digital (@Delphi_Digital) April 12, 2019

This phenomenon is important because growth stocks (bitcoin) tend to outperform similar stocks during periods of slower economic growth and lower earnings. Therefore, Delphi concluded that:

“Considering the prospect of slowing economic growth and the sluggish earnings expectations, the market performance of growth stocks may outperform other products in the broader market. If this is the case, investors will buy high risks with significant appreciation potential. Assets, bitcoin may be sought after."

Bitcoin perfect storm is coming soon

Delphi Digital researchers are not the first to claim that macroeconomic factors may boost Bitcoin prices in the coming months. As NewsBTC reported previously, Brendan Bernstein, founding partner of industry investment firm Tetras Capital, recently explained why he is optimistic about the long-term prospects of BTC. The partner seems to have doubts about Ethereum.

He pointed out that the Federal Reserve Board (Fed) has decided to adopt a quantitative easing (QE) strategy in the past 10 years, which may contribute to the growth of BTC. Why is this?

Quantitative easing is a fiscal policy in which central banks buy assets to boost the economy. It can be said that for most of the past 10 years, quantitative easing has been a positive catalyst for the development of cryptocurrencies, but some people worry that the economic situation may become more dangerous (such as asset inflation, fiscal instability, etc.). Opposers like Bernstein and Ikigai's Travis Kling may worry that with the excessive use of quantitative easing, the economy may be in a disadvantageous position, which may give BTC an opportunity to use it as an irrelevant means of value storage. Achieve price rebound.

Bernstein continues to point out that macroeconomic and political factors may give decentralized digital currencies the opportunity to attract people to democratic socialism, modern monetary theory, rising retirement populations but poor financial conditions, and the rapid expansion of US sovereign debt. Achieve better performance with attention. He claims that all of this, together with quantitative easing, is the reason for the upcoming "BTC Perfect Storm."