Bitcoin, like other cryptocurrencies, is not legal tender issued by the government. It is not fiat and therefore will not give in to inflationary pressures such as the one currently experienced in the United States.
Inflation is an economic situation in which the value of money falls. It is during this period that people look for a better store of value.
Digital currencies like Bitcoin are considered counter-inflationary assets, acting as a hedge against the damaging effects of inflation of a local currency.
Therefore, it makes sense to believe that the largest cryptocurrency by market cap, along with its fellow cryptocurrencies, will benefit during this time when countries like the US are struggling with economic turmoil.
Bitcoin, Other Cryptocurrencies Could Rebound Amid Jobless Claims
One event in the US that may be significant for Bitcoin and its other cryptocurrencies is the release of initial jobless claims by the Department of Labor.
Last week, economists thought related claims were at 193,000. However, this week, that number was shattered, hitting 219,000.
Image: AP News
This spike in claims could trigger a crypto rally, especially if the number of people in the US filing for unemployment insurance continues to rise.
The Federal Reserve believes that low unemployment may increase inflation levels. Therefore, as inflation continues to drive down the value of the dollar, more and more people will eventually look for better stores of value.
Bitcoin, having gained quite a reputation as a viable store of value, could be the next stop for these folks.
As BTC activity increases, a significant uptick in trading prices by the digital asset can be observed.
Bitcoin price at a glance
Alpha cryptocurrency is once again seeing a bit of a decline after hovering around the $20K marker for the past few days.
At the time of publication, Coingecko monitoring puts the trading price of Bitcoin at $19,943. It is down 1.4% in the last 24 hours, but is still up 1.9% last week.
He has entered the month of October in better shape than last month. By the way, this month is said to be one of the friendliest for cryptocurrency.
This could turn out to be another valid selling point for the digital asset, as the falling value of dollars could encourage people to hold their cash in Bitcoin and other cryptocurrencies.
Analysts assume that this scenario will have a positive impact on cryptocurrency prices, a sentiment that Bloomberg Intelligence commodity strategist Mike McGlone also finds plausible.
McGlone, for his part, believes that Bitcoin has already bottomed out and will be on its way to another rally to outperform many major assets.
BTCUSD pair loses $20K handle, now trades at $19,897 | Featured image from Easy Crypto, Chart: TradingView.com