The month of May kicked off with some significant Bitcoin Price fluctuations. The week ended with BTC trading near the $34,000 USD mark, close to this year’s previous low price of approximately $33,000 USD in January.
Bitcoin Twitter is celebrating the cheap price for Sats.
Uncertainty is around, but not doubt:
Perhaps part of the cause for the declines this week, inflation continues to play an important role in financial news all over the globe. Reports by national central banks reflect the tension between increasing interest rates and the effect of such actions on economic activity. Traditional views predict an increase in the cost of Central Bank lending will slow inflationary pressure and at the same time reduce consumer spending. The trend appearing in many nations of late is a contracting of GDP while prices continue to rise. National governments are struggling with knowing which levers to utilize to provide much needed stability in the global economy.
Turkey saw fuel, utility and consumer goods combine to equal an annual inflation rate of nearly 70%. Many economists find fault with the nation’s monetary policy that is perpetuating deflation of the Lira.
The European Union’s official board of statistics have recognized a 36.8% year over year inflation rate for producers. The blame is being squarely placed on concerns surrounding and direct effects of the Russian invasion of Ukraine.
Inflationary woes have not been strictly a European issue. In Argentina inflation has been a runaway train, posting an annual inflation rate over 52% in February and now with the imminent threat of default on debt payments, the South American nation has accepted a $45B bailout from the IMF. The agreement comes with conditions that outright eliminate any adoption of Bitcoin as tender and sets out expectations that the Argentinian government will discourage the use of transactions on the blockchain. A decentralized form of money is a threat to any organization that plans to utilize finances to control the populace and this pattern of providing fiat loans that also attempt to limit the adoption of Bitcoin is a recurring storyline.
On May 4th the US Federal Reserve increased interest rates by 0.5%. This marked the largest single increase by the central bank in more than 20 years. With dramatic language the chair announced the action as a response to the financial pressures felt by the American people.
NY State Senators have brought forward a new law to ban Bitcoin mining. Documentation from New York declares the Assembly Bill A7389C, “Establishes a moratorium on cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions.” The bill claims to champion the efforts of reversing climate change by limiting the use of electrical energy required to perform the equations to solve for Bitcoin solutions. A story worth watching to be sure.
What is the best way to end the week on a positive note? Despite much negativity in the world at large, many Bitcoin investors are responding and making the most of the fluctuation in the price of BTC by leaning in to “buy the dip”.
Bitcoiners are always bullish on their favorite money because they believe it’s hard to stop from being successful over the long-term. The fact that the IMF has warned Central African Republic against bitcoin adoption is seen as a something positive. The IMF can warn as long as they want, nobody can stop the Bitcoin protocol from executing.
In a similar fashion, Bitcoiners see the IMFs tactic in Argentina as an attack on Bitcoin. For Bitcoiners, attacks like these only show the success of Bitcoin around the world.
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