Hello dear readers, in this post I will be sharing information on whether or not macroeconomic variables affect the price action of cryptocurrencies, specifically how macroeconomic control and management measures may or may not be affecting the price of Bitcoin.
In this regard, and according to an article published on the CryptoNews portal, it was revealed in a study recently published by the New York Federal Reserve that Bitcoin's price action is not appreciably affected by macroeconomic events and announcements that usually affect other asset classes.
The report, titled The Bitcoin-Macro Disconnect, argues that the Bitcoin price has a low correlation with indicators of economic activity, such as unemployment rate or interest rate developments, as well as macroeconomic news in general.
In the study, the authors analyzed the impact of specific macroeconomic factors on the BTC price. Factors specific to the cryptocurrency industry, such as the collapse of FTX, were not taken into account in the study.
The report highlights an exception in terms of inflation figures, stating that except for the CPI, or consumer price index, all other indicators have a minor effect on Bitcoin. In other words, major stock indices and assets such as gold and silver respond to macroeconomic news with significant coefficients of greater magnitude than bitcoin.
SOURCES CONSULTED
CryptoNews Bitcoin is not sensitive to macroeconomic signals: New York Fed. Link
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