Bitcoin smashes $70k. What next for stocks, bonds, USD?
BTC hits $70k for first time ever
Can Bitcoin reach $100k?
With Bitcoin's volatility currently above 50%*, there's a 68% chance, derived from a one standard deviation move, that BTC could fluctuate within +/-50% in the next year. This wide range theoretically places $100k within reach. Volatility, while indicative of risk, also suggests substantial growth potential for those betting on Bitcoin's continued ascendancy. Investors and traders alike watch these indicators closely, pondering if the elusive $100k mark is a question of "when," not "if." It is worth noting that an opposing move is just as likely, which would halve the price to $35k.
S&P 500 unchanged near all-time highs
Despite historic correlations between the stock market and Bitcoin, the S&P 500 remains relatively unchanged, hovering near its all-time highs without a strong current correlation to Bitcoin's movements. Historically, both assets were seen as alternatives to traditional investments, moving in tandem during certain periods. However, this detachment highlights the differentiation of asset classes and the unique factors driving their respective markets today.
Interest rates moving lower, bonds higher
As Treasury yields, a benchmark for U.S. interest rates, trend lower in recent trades, bonds have edged higher. However, this movement seems to be somewhat isolated from Bitcoin's performance. Typically, lower interest rates encourage investment in riskier assets, hoping for higher returns; still, Bitcoin’s correlation with these traditional financial indicators is not strongly evident. This suggests that other factors are influencing Bitcoin's trajectory, independent of traditional economic indicators.
US dollar falls amid BTC rally
The US dollar has seen a recent decline in its value, although not necessarily in direct correlation with Bitcoin's rally. While the dollar weakens in some pairs, Bitcoin’s surge seems to follow its own set of drivers, separate from the traditional currency market dynamics. Dovish language from the Federal Reserve Chair Jerome Powell, along with softening US data, appear to be influencing the dollars recent weakness. The complex relationship between digital and fiat currencies continues to evolve, with each influencing the global economy in multifaceted ways.
*BTC volatility provided by The Block
How to trade US dollar
- Open an account to get started, or practice on a demo account
- Choose your forex trading platform
- Open, monitor, and close positions on USD pairs
Trading forex requires an account with a forex provider like tastyfx. Many traders also watch major forex pairs like EUR/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.
You can help develop your forex trading strategies using resources like tastyfx’s YouTube channel. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.
Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.
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