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10
May, 2020

Macroeconomic Factors Behind Bitcoin Rise

During the last days, Bitcoin’s price was moving in great volatility, setting the base for more conversations regarding key factors that may affect them like public economics, traditional stock markets, and consumer spending.

 

At the macroeconomic level, the common characteristic that affects Bitcoin’s price was the lack of trust for governments, derived from coronavirus pandemic. The lack of trust can’t be depicted quantitatively, except for government acceptance or rejection, but seems to have a positive impact on Bitcoin’s price.

 

Investors can feel that governments cannot handle the crisis and cannot control economic and monetary policies in efficient ways. For this reason, those investors feel the need to diversify their portfolios in various assets, which will secure positive returns during the crisis.

 

The above elements, in assistance with negative interests, have shaped the current situation in the market showing that Bitcoin could become a fundamental answer for portfolio diversification, with weighted risks and returns.