Investment from institutions in Bitcoin (BTC) has increased, yet its price remains sluggish in reflecting this rising demand, as highlighted by a key figure in the digital assets sector.
Even with growing adoption by major financial institutions, Bitcoin has faced notable ETF outflows and a cautious sentiment at the beginning of 2025, which has prevented it from reaching previous highs.
The expert pointed out that the combination of short-term market behavior and uncertainty in the macroeconomic landscape has hindered momentum, despite initial gains driven by optimism regarding regulatory changes in Washington.
Recession as a Potential Driver
In a recent discussion, the expert posited that Bitcoin’s inherent qualities—scarcity, decentralization, and detachment from conventional monetary systems—make it a compelling hedge against economic downturns.
He suggested that a potential recession in the US might act as a significant impetus for Bitcoin’s next upward movement.
He explained:
“A recession would be a substantial catalyst for Bitcoin. It’s long liquidity, meaning it profits from heightened fiscal spending, increasing deficits, and reduced interest rates—all characteristics typically observed in a recessionary climate.”
He noted that while gold has reached unprecedented heights amid escalating economic uncertainty, Bitcoin has yet to follow suit. This divergence, he attributed to the way Bitcoin is often perceived as a risk-on asset rather than a safe haven during turbulent times.
Furthermore, he clarified that the recent outflows from Bitcoin ETFs are mainly the result of hedge funds unwinding spot-futures arbitrage strategies rather than long-term holders exiting the market.
He underscored that institutional confidence in Bitcoin remains robust despite recent volatility, stating:
“The core long-term holders are still present.”
US Bitcoin Reserves
He also commented on a notable initiative by the former President to create a US Strategic Bitcoin Reserve, describing it as a strong indication of endorsement for Bitcoin’s distinctive status within the digital asset landscape.
However, he pointed out that the details regarding how the government intends to acquire and manage Bitcoin are still ambiguous, which adds to the current market uncertainty.
Additionally, he mentioned that there is still an influx of institutional money into the market. He observed that professional investors seem to be capitalizing on the current price dip, many viewing Bitcoin’s weakness as an opportunity to accumulate more.
He noted:
“Some of the most astute Bitcoin accumulators we converse with are considering this dip as an opportunity.”
In spite of ongoing regulatory uncertainties and concerns regarding security in the broader cryptocurrency arena, he remains hopeful about Bitcoin’s long-lasting significance.
He further argued that investors will increasingly see Bitcoin as a safeguard against traditional financial instability, possibly revitalizing its momentum in the coming months amidst an unpredictable economic environment.
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