The U.S. economy is kinda struggling. The Core PCE (which is a fancy way of measuring inflation) dropped from 2.9% to 2.6%. That might sound like a good thing, but it’s actually a sign that people are feeling the pinch. Wages went up by 0.9%, but spending dropped by 0.2%. Basically, folks are earning a bit more but spending less because life’s getting expensive. The Federal Reserve (the Fed) is in a tough spot—they can’t really raise interest rates anymore without making things worse. Millions of jobs have already disappeared, inflation isn’t under control yet, and debt is piling up. It’s a mess.
Speaking of Bitcoin, the market’s been pretty chill lately. Over the weekend, prices didn’t move much—whether it went up or down, it all evened out by the end of the day. It’s like the market’s taking a breather.
But here’s the thing: everything feels chaotic right now. From crypto scams (rug-pulls) to talks of interest rate cuts, it’s like the world’s throwing everything at us at once. February has been a weird month—traders are focusing more on technical analysis than fundamentals. Some sectors, like AI, meme stocks, and Nasdaq, are all over the place. Meanwhile, government bonds are falling because investors are worried the economy isn’t growing enough.
ZeroHedge put it best: “From Rug-Pulls To Rate-Cuts: Everything, Everywhere, All At Once.” It really is chaos.
– The economy? Slowing down.
– Inflation? No more disinflation—it’s gearing up for a second wave.
– Crypto? Getting wrecked.
– AI stocks, meme coins, momentum plays? Swinging like crazy.
– Government bonds? Falling, because investors are scared the economy won’t grow.
– Interest rates? Hopes for cuts are rising—now markets think there could be three cuts in 2025 instead of just one.
Now, over in China, the Politburo (their top decision-makers) made some predictable moves over the weekend. The People’s Bank of China (PBOC) is pumping money into the economy, and their M1 money supply (cash and easy-to-access funds) is rising. This could mean the bear market (when prices are falling) isn’t coming anytime soon. The Chinese yuan is weakening, and other Asian currencies are following suit. This is actually good news for Bitcoin because when traditional currencies lose value, people often turn to crypto as a hedge.
China just released their NBS Manufacturing PMI (which is basically a measure of how well their factories are doing), and it came in at 50.2. That’s a bit higher than the forecast of 49.9 and way better than the previous 49.1. On paper, that looks good—like their manufacturing sector is picking up. But here’s the catch: how is this happening when the overall economy is kinda struggling?
The thing is, this boost in factory spending isn’t coming from actual economic growth or people buying more products. Instead, it’s likely coming from injections of money—either from the central bank, investors, or government debt. Basically, the government and banks are pumping money into the system to keep things moving. They’re making loans cheaper and offering subsidies on stuff like electronics, cars, and houses to encourage people to spend more. It’s like they’re trying to kickstart the economy by making people feel like it’s a good time to buy things.
But here’s the twist: this kind of liquidity (cash flow) isn’t coming from real economic growth. It’s just moving money that already exists around the system. And when you do that, it can lead to inflation because there’s more money chasing the same amount of goods and services. So, while it might look like the economy is improving, it’s really just a temporary fix.
Now, what does this mean for Bitcoin? Well, when traditional economies are shaky and governments are printing or injecting money like this, people often turn to Bitcoin as a hedge against inflation and uncertainty. So, even though things might look messy now, the long-term outlook for Bitcoin is still pretty bright. The bear market (when prices drop) isn’t here yet, and 2025 could still be a good year for crypto.
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