Home Cryptocurrency Bitcoin Steadies on Strong GDP Report in U.S.

Bitcoin Steadies on Strong GDP Report in U.S.

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Bitcoin held steady on Thursday morning as the U.S. reported 3.3% growth in its gross domestic product during the fourth quarter, beating economists’ estimates of 2% growth. But the Bureau of Economic Analysis did note that growth had slowed down from the 4.9% rate at which in increased in Q3 of last year.

The growth last quarter means the economy is nearly keeping pace with the 3.4% rate of inflation seen in December. Inflation is the speed at which prices increase on good and services. All other things being equal, a high inflation rate can leave consumers feeling like their money doesn’t spend the way it used to.

The BEA noted in its Thursday morning report that strong consumer and government spending were behind the growth seen in Q4.

At the time of writing, Bitcoin is trading for $39,817 after just having reclaimed the $40,000 mark early yesterday morning. The world’s oldest and largest cryptocurrency by market capitalization saw just shy of $30 billion worth of BTC trading volume yesterday, according to CoinGecko data.

The rosy U.S. GDP report comes out amid the possible expiration of billions worth of crypto futures—a type of derivative that investors use to predict on the future price movements of assets like commodities, currencies, or crypto assets.

“Tomorrow’s expiry is particularly noteworthy with around $3.7 billion in BTC options notional open interest set to expire, with a max pain level at $41,000,” Derebit Chief Commercial Officer Luuk Strijers said in an email. “Similarly, for ETH, we are looking at about $2 billion in options notional open interest, with a max pain level of $2,300.”

But he added there’s signs that many traders don’t intend to let their contracts expire just yet. “This period has seen the most activity in the January and February expiries,” he said, “suggesting that many traders are rolling their positions forward.”

This all comes after an especially hectic January that saw the approval of 11 different spot Bitcoin ETFs, billions worth of trading of their shares, and then sizable outflows from Grayscale Bitcoin Trust as investors sold their previously-locked-up shares.

All the selling has caused strong headwinds for Bitcoin, which sank as low as $38,678 at the start of the week.

 

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