Is Bitcoin a good investment? Let’s have a look at it together, as Bitcoin and other cryptocurrencies fell Friday ahead of the release of the monthly U.S. employment data. Because stock markets will be closed for Good Friday, digital assets will be a leading indicator of risk sentiment in response to the data.
Bitcoin’s price has dropped by less than 1% in the last 24 hours to around $27,900.The largest digital asset was trading around the $28,000 mark, where prices have recently been hovering — at the highest level since the crypto slump intensified last June but below a recent jump near $29,500.Bitcoin has increased by 70% this year, prompting predictions of a new bull market.
“When a plethora of markets will be closed, we will see if traders will look to take advantage of the one market that trades 365 days a year,” said Edward Moya, an analyst at broker Oanda. “Bitcoin remains near the upper boundaries of its trading range and could see a good chance to breach the $30,000 level over the weekend.”
In response to macroeconomic factors influencing both asset classes, cryptocurrencies have recently resumed their association with equities, moving in lockstep with the Dow Jones Industrial Average and the S&P 500. With the stock market closed for the holiday, it will be fascinating to see how digital assets respond to the March nonfarm payrolls report, which is scheduled to be released at 8:30 a.m. Eastern time.
The large surge in Bitcoin this year has come with hopes that the Federal Reserve will become more liberal on monetary policy, easing back on interest-rate hikes and potentially reducing rates in 2023, answering the question, “is Bitcoin a good investment?” The central bank’s rate rise campaign over the last year in an attempt to rein in inflation was a driving reason behind the selloff in equities and cryptos over the same time period.
The employment report on Friday will be a significant data point for the Fed before its next rate decision, and investors will likely want to see that labor market tightness is easing — but not substantially, which may signal that the economy is on the verge of a recession.
Apart from Bitcoin, Ether, the second-largest cryptocurrency, fell 1.5% to $1850. Smaller cryptos or altcoins performed similarly, with Cardano and Polygon also losing 1.5%. Memecoins were weaker, with Dogecoin losing 10% of its value following an Elon Musk-fueled spike in recent days, while Shiba Inu lost only 1.5%.