Bitcoin is once again attracting attention, with a surge in price sparking enthusiasm among investors and analysts. But what explains this sudden increase? Several economic factors, such as improving US employment data and a wave of purchases via ETFs, are converging to support the crypto's rise in value. Let's take a closer look at the elements driving this rebound.
A recovery in American employment and a renewed appetite for risk
Recent data from the American job market brings a wind of optimism, and this is even felt in the price of bitcoin.
According to the latest report from the Department of Labor, new applications for unemployment benefits decreased by 15,000 for the week of October 19.
This decline, although it seems minimal, reflects a strong labor market. This often leads to anticipation of interest rate reductions by the Federal Reserve, which restores investors' appetite for risk.
Added to this is a renewed interest in technology stocks. Giants like Tesla are performing above forecasts.
Tesla, for example, announced a potential revenue increase of 30% by 2025, beating many analysts' estimates.
With such news, tech stocks gain value, which has a ripple effect on Bitcoin.
Historically, technology stocks and Bitcoin show a strong correlation, especially in periods when investors adopt a more optimistic stance towards risks.
In short, this recovery in the job market and the good health of the technology sector contribute to stabilizing and strengthening the attractiveness of Bitcoin. Investors feel encouraged to diversify their portfolios, once again including crypto assets in their strategies.
The effect of ETFs and technological optimism
Bitcoin ETFs also play a vital role in the current dynamic. Net inflows recorded, notably thanks to BlackRock's iShares product, reinjected $192 million into the Bitcoin market.
This figure contrasts with the significant outflows of certain competing ETFs, such as those of Bitwise and ARK, but it demonstrates the impact that massive capital inflows can have on the price of Bitcoin. This injection of funds stimulated the market and reduced fears of price stagnation.
At the same time, recent profit announcements from large technology companies further reinforce the favorable climate.
SK Hynix, supplier of memory chips to Nvidia, for example, announced rising profits thanks to increased demand linked to artificial intelligence.
This boom in the technology sector is restoring investor confidence in digital-related sectors, and that naturally includes Bitcoin.
Finally, the correlation between bitcoin and technology stocks is far from a coincidence. In October, the 50-day correlation between Bitcoin and tech stocks remained above 80%.
Although this correlation fluctuates, it is often strong when markets are driven by similar factors, such as cash flow or optimistic economic data. During periods of growth in tech stocks, Bitcoin benefits from a mirror effect, driven by this same dynamic.
Bitcoin benefits from a favorable economic context
In short, the price of Bitcoin is recording a notable increase, propelled by a positive economic situation in the United States and a return of optimism on the stock and technology markets.
The significant inflow of capital into Bitcoin ETFs, combined with good news on the jobs and technology front, is strengthening the crypto's appeal among investors. This movement shows that, despite its fluctuations, Bitcoin remains sensitive to major global economic and financial trends.
As markets continue to evolve, Bitcoin's trajectory remains to be monitored. If these trends continue, the crypto could well see its price rise even higher. For now, the current rebound is a reminder that Bitcoin, far from being a simple speculative asset, is also a thermometer of global economic expectations.
Maximize your Tremplin.io experience with our 'Read to Earn' program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
