Bitcoin fell alongside global stocks today following a stronger-than-expected US inflation report and a surge in weekly jobless claims.

Bitcoin's Sensitivity to Economic Indicators

The decline highlights Bitcoin's increasing sensitivity to economic indicators and central bank policies. Leena ElDeeb, a research analyst at 21Shares, noted that Bitcoin has become increasingly reactive to inflation data and monetary policy decisions over the years. “A decrease in interest rates tends to have a positive impact on Bitcoin by lowering borrowing costs,” ElDeeb said.

Impact of Upcoming US Elections

Market experts believe that the US presidential elections to be held in November 2024 will also have a significant impact on market movements. Coinbase’s Director of Research David Duong suggested that the cryptocurrency market could see increased interest from institutional investors looking to trade the election results. “We think the market reaction in the fourth quarter of 2024 will ultimately be neutral to positive,” Duong said.

Expected Changes in the Crypto Market

Duong also noted the Fed’s move toward quantitative easing in September and China’s recent stimulus measures, suggesting that it could take months for these actions to fully impact liquidity. “Overall, we remain optimistic about the outcome for crypto, especially from a regulatory perspective as we approach the election,” he added.

The crypto market remains uncertain, considering current economic events and political factors. However, experts expect the long-term outlook for Bitcoin and other cryptocurrencies to remain positive.