Analysis: The current macroeconomic environment, the US short-term spending bill and other factors are favorable to risk assets such as Bitcoin

Bitcoin has gained 5.4% over the past seven days, boosted by the Federal Reserve’s 50 basis point rate cut. However, industry analysts remain divided on the direction Bitcoin will head in the coming weeks of the fourth quarter. MV Global partner Tom Dunleavy believes that the current macroeconomic environment is a “perfect setup” for risk assets such as cryptocurrencies. He noted that most signals from the U.S. economy are neutral to expansionary, rather than recessionary. Dunleavy also stressed that the market has already digested the impact of the expected 250 basis point rate cut in the United States in the future. He added that the aggressive rate cut, combined with the expected 18% earnings growth in the next 12 months, is a “never seen before” phenomenon. Meanwhile, VanEck digital asset head Matthew Sigel said that the U.S. Congress’ recent short-term spending bill, which proposes to keep the federal government running in the fourth quarter, will be “good for Bitcoin” because it directly means that there will be a “lack of meaningful fiscal reform” in the next three months. He added that if the bill is passed, it may reduce “downside volatility.” Meanwhile, Ryan Lee, chief analyst at Bitget Research, said that the improving macro environment, continued accumulation of MicroStrategy, and inflows into spot Bitcoin ETFs are all bullish signs. However, he also warned that the Fed's rate cuts have led to high market volatility, and any pessimistic macro developments could push Bitcoin prices back to the $58,000 level. Nansen chief analyst Aurelie Bathere said in a recent report that positive data from the US economy showed resilient growth, which has driven the current rebound in risky assets. However, it pointed out that there is still room for further downside. She explained that this vulnerability stems from the expensive cost of US stocks, with a forward price-to-earnings ratio of more than 20 times. (CryptoSlate)