Bitcoin Faces Continued Pressure Despite Monetary Easing

- Despite Global Monetary Easing Policies, Bitcoin Faces Pressure and Lacks Price Momentum - Bitcoin's Growth Rate Exceeds Consumer Price Index (CPI) Increase, Serving as an Inflation Hedge [Unblock Media] Currently, a simultaneous global campaign of monetary easing is taking place. While many asset classes are on an upward trend as a result, Bitcoin remains under pressure. There is news that the U.S. Federal Reserve (Fed) and other major Western central banks have embarked on new monetary easing policies. Consequently, the S&P 500, Nasdaq, bond yields, and gold prices are all nearing record-high levels. The U.S. Fed is expected to cut the benchmark interest rate by 25 to 50 basis points later this month, marking the first easing cycle since 2019. The European Central Bank, Bank of England, and Bank of Canada have already reduced interest rates multiple times. While Japan has not yet participated, its benchmark and policy rates are close to zero. In traditional markets, these monetary easing measures have resulted in expected sharp rises in stock, bond, and gold prices. However, Bitcoin has not joined this trend. Bitcoin prices remain below $60,000, about 20% lower than the all-time high of $73,500 recorded six months ago. Bitcoin's recent performance could be a temporary correction after significant gains. In the long run, Bitcoin is still up over 40% year-to-date and 127% year-over-year. However, it remains lower than the $69,000 recorded three years ago. Considering the sharp inflation over this period, Bitcoin’s performance might appear even more negative. Steno Research pointed out that Bitcoin has not experienced many interest rate cut cycles. Additionally, when the first rate cut of 2019 occurred, Bitcoin dropped by about 15%. However, when massive monetary easing began in March 2020 due to the COVID-19 pandemic, Bitcoin initially plunged but then rebounded. This shows how monetary easing measures like interest rate cuts can impact Bitcoin prices. Ultimately, larger-scale emergency measures might be necessary for Bitcoin prices to rise. There are also evaluations regarding Bitcoin’s role as an inflation hedge. Comparing the changes in the Consumer Price Index (CPI) and Bitcoin prices over the past few years shows that Bitcoin’s growth rate significantly exceeds the CPI increase. This indicates that Bitcoin has somewhat played a role as a hedge against inflation. Taking all this information into account, the future performance of Bitcoin is likely to be significantly influenced by the extent and speed of central bank interest rate cuts.