Confidence in the American economy has increased significantly following Donald Trump’s election victory. Since then, the mood on Wall Street can best be described as an explosion of euphoria and confidence in the future.
As well as Bitcoin (BTC) as well as the US stock indices are currently recording one all-time high after another.
Why is the American economy so strong?
First, economic growth remains above average and consumer spending remains strong. Unemployment claims remain low and wages are rising faster than inflation. At the same time, the number of bankruptcies is falling while corporate profits are reaching record levels. In addition, American household balance sheets are solid and the government is supporting the economy through budget deficits. Last but not least, the highs on the financial markets are creating a general feeling of prosperity.
In short, the economy thrives, which creates confidence, and that confidence allows the market to take risks.
It’s that simple, and Trump’s election victory seems to be contributing to this positive sentiment. He is of course seen as a business-friendly president, especially for American companies, which is particularly reflected in these market dynamics.
Hunger for risk assets like Bitcoin
At the moment we can speak of a clear willingness to take risks in the USA.
How does this show up? Among other things, the decreasing difference between high-yield corporate bonds (junk bonds, high risk) and government bonds (low risk). Investors have confidence in the economy and are willing to lend money to riskier companies at lower interest rates. This is another sign that we are increasingly becoming one “Risk-On”-climate.
In short, this is what a bull market looks like. Now the question naturally arises as to whether Bitcoin can reach the $100,000 mark. The probability of this appears to be increasing, which is significant because investors may not realize that until this price is reached digital currency has reached a new phase of development.
Prices below this could be seen as a sign that Bitcoin is struggling to maintain a dominant position in the financial world. In this regard, there are exciting months ahead for the Bitcoin price.
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