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When it comes to Bitcoin, and the crypto market more broadly, no news is often good news.
In July, macroeconomic indicators took a turn for the worse—including a subpar jobs report and yet another rate hike from the Fed—while Bitcoin and Ethereum stood their ground. In 2022, both assets took a dive amid generationally high inflation levels; this time, however, the crypto market appears to be far more resilient than before.
After skyrocketing over +80% on the year, Bitcoin held steady around the $30,000 per token mark throughout July. However, its next big test will come next month when over $1.8 trillion in federal student loan repayments are added back to American household budgets.
For some, the looming resumption of student debt repayments is seen as a potential “straw to break the camel’s back” in the U.S. economy. With billions of dollars’ worth of discretionary spending being diverted to creditors, a significant drop in U.S. consumer spending could result in job cuts, earnings losses and, yes, even a potential recession.
Market Snapshot: August 4, 2023
- Inflation Rate: 3.0%
- Fed Rate: 5.25% to 5.50%
- Gold Price: US$1,942/oz.
- Silver Price: $23.55/oz.
- Bitcoin Price: US$29,243
- Ethereum Price: US$1,846
For now, the broader U.S. economy appears to be holding steady despite numerous macro-level bearish indicators. Yet the massive structural problem posed by American household student debt may be too much to bear for the current bull market.
The upside is that Ethereum, Bitcoin, and other growth assets are still chugging along, and have been throughout numerous stock market downturns throughout the year. Now that the FTX scandal is in the rearview, and new blockchain forks lie ahead, it’s an exciting time for cryptocurrency investors.
Yet amid the excitement in alternative markets, monetary policymakers are threatening another interest rate hike in September and key growth stocks are now taking a downward turn. Before long, we could see a long-term bear market take form before year-end.
There’s no telling where the markets are going to head in the back half of 2023. But if job cuts, corporate earnings, interest rates, and indebtedness are any indication—it might not be pretty.
When it comes to investing, it’s crucial that you stay ahead of the curve. To protect your wealth, while capturing large upside potential, consider diversifying with cryptocurrencies and precious metals within a self-directed IRA. These assets have proven to be resilient in the first half of 2023; who knows what new heights we might reach in the months ahead.
Liam Hunt, M.A., is a financial writer covering global markets, monetary policy, retirement savings, and millennial investing. His commentary and analysis have been featured in the New York Post, Reader's Digest, Fox Business, and Forbes.
