On the 3rd of July, Macroscope compared the current market conditions to the 1970s. The Macroscope team believes Bitcoin has the prospect of performing better than most assets over the decade just like gold in the 1970s.
For the record, gold had a 50% decline from December 1974 – August 1976 due to the Fed’s rate hike in previous months. In a similar way, BTC now trades at more than 60% below its 2021 high due to the Fed. The LUNA FUD also contributed to the loss of billions of dollars from the crypto market. Additionally, Big industry players like the Celsius network and Three Arrows Capital have faced huge liquidations, further wiping millions of dollars from the market.
The 70s was an era known for shortages as the inflation rate, unemployment rate, and budget deficits were on the high side. Recent reports show that the world is approaching a global economic recession as a result of the stalling pandemic, high cost of living, high unemployment rate, and food scarcity.
As it stands, Bitcoin is not left out in the scheme of things. Bitcoin’s value has crashed tremendously, and so have altcoins. Despite the turn of events though, Bitcoiners are confident that the flagship crypto asset will go through an explosive rebound, coming out stronger.
Between August 1976 – January 1980, gold increased by over 700% after its 50% decline. During this period, the Fed kept increasing interest rates.
Will Bitcoin Rebound?
In the last few years, Bitcoin has traded in the same pattern as stocks. As it stands, all BTC needs to perform better than stocks is a passing of the current rate-driven panic.
Interestingly, the recent market crash is another opportunity for investors to fill their bags. Those who missed BTC below $20K in 2020 now have a second chance. Most altcoins are also trading very far off from the all-time highs. Just as gold bounced back after the market chaos in the 1970s, Bitcoin and altcoins will also bounce back in the coming months or years.