Bitcoin, as with other cryptocurrencies, is not government-issued legal tender. It is not fiat and therefore will not yield to inflationary pressures such as those experienced in the United States today.
Inflation is an economic situation where the value of money falls. It is during this period that people look for a better store of value.
Digital currencies like Bitcoin are considered anti-inflationary assets, acting as a hedge against the damaging effects of local currency inflation.
So it only makes sense to believe that the largest crypto by market cap, along with its fellow cryptocurrencies, will benefit during this time when countries like the US are struggling with economic turmoil.
Bitcoin, other cryptos could rally amid jobless claims
One event in the United States that may be significant for Bitcoin and its fellow cryptocurrencies is the release of initial jobless claims by the Department of Labor.
Last week, economists thought related claims were 193,000. However, this week, that number was broken, reaching 219,000.
Image: AP News
This increase in claims could trigger a crypto rally, especially if the number of individuals in the US applying for unemployment insurance continues to rise.
The Federal Reserve believes that low unemployment may increase inflation levels. So, as inflation continues to drive down the value of the dollar, more and more people will look for better stores of value.
Bitcoin, having gained a reputation as a viable store of value, could be the next stop for these people.
As BTC activity increases, a significant increase in the trading price of the digital asset can be seen.
Bitcoin price at a glance
The alpha cryptocurrency is experiencing a small drop again after hovering around the $20,000 mark for the past few days.
At press time, Coingecko The tracking puts the Bitcoin trading price at $19,943. It is down 1.4% in the last 24 hours, but is still up 1.9% in the past week.
He entered the month of October in better shape than last month. By the way, this month is said to be one of the friendliest for cryptocurrency.
This could be another valid selling point for the digital asset, as the falling value of greenbacks could encourage people to hold their cash in Bitcoin and other cryptocurrencies.
Analysts presume that this scenario will affect crypto prices in a positive way, a sentiment that is also seen as plausible by Bloomberg Intelligence Commodity Strategist Mike McGlone.
McGlone, meanwhile, believes Bitcoin has already bottomed out and is headed for another rally to outperform many major assets.
BTCUSD pair loses $20K handle, now trades at $19,897 | Featured image from Easy Crypto, Chart: TradingView.com