The first significant University of Michigan Consumer Survey was released on April 11th. The combined results from this survey provide the most compelling evidence that Bitcoin’s price trajectory will soon make a positive turn. The survey produced other important information on what consumers anticipate in terms of inflation and unemployment. It made a surprisingly clear case to stack sats, but proved its strength. We think the data clearly indicates that Bitcoin’s potential as a long-term store of value is continuing to gain traction even further given the uncertain economic globally.
Inflation Expectations Fuel Bitcoin's Appeal
The University of Michigan Consumer Survey also released a series of 1-year inflation expectations that exceeded anything seen in the survey since 1981. Most important of all, heightened concern over inflation and escalating prices is pushing many investors right into Bitcoin’s waiting arms. Others view it as a hedge against inflation due to its finite supply.
The survey not only showed this higher expected inflation, but it made the case for Bitcoin being a potential store of value even more compelling. This misalignment between what consumers expect inflation to be and the Fed’s forecast was highlighted. Experience has taught us that consumers are usually more in tune with where the economy is headed than central banks. They are better able to predict shifts.
The University of Michigan Consumer Survey was cited as a reason for the divergence between consumer inflation expectations and the Fed's outlook. During the discussion, the wisdom of the survey was hailed as a historical precursor to the consumer being more prescient than the central bank.
Unemployment Concerns Prompting Bitcoin Buys?
Beyond inflation expectations, the University of Michigan Consumer Survey showed rising unemployment worries. Falling unemployment expectations survey results would have the Federal Reserve reaching for the monetary policy easing button.
This would mean that an easing of monetary policy, such as cutting interest rates or pumping liquidity into markets, would devalue all fiat currencies. Because of this, Bitcoin can be an even more attractive alternative asset. During economic turmoil, investors look to Bitcoin as a reprieve. This perception increases the demand and what could result is an increased price of the product.
Bitcoin’s claim to fame as a “store of value” has been deconstructed by smart people far and wide. They frequently associate it with ideas such as “flight-to-quality” and “safe haven.”
"store of value" claim with "flight-to-quality" and "safe haven." - Andy Baehr
Bitcoin's Resilience Amid Market Volatility
The University of Michigan Consumer Survey indicates strong consumer sentiment. This is reflected in the positive bullish outlook that has kept Bitcoin strong through mixed market responses. Bitcoin has demonstrated a remarkable capacity for self-preservation, soaking up against a backdrop of shifting financial conditions. This resilience only serves to bolster its reputation as a possible safe haven asset.
Analysts point to the survey data as the smoking gun. The Bitcoin ordinals boost indicates that investors are increasingly viewing Bitcoin as a long-term store of value rather than simply a speculative asset. That changing perception might help bring some real stability to Bitcoin’s volatile price. Consequently, the product may be more appealing to institutional investors.
"low" price to challenge bitcoin's aforementioned resilience, but we should push back here. - Andy Baehr
