The complex economic logic behind the surge of Bitcoin under the "Goldilocks Balance" of the US economy

On the recent global economic stage, the US economy seems to be in a state described as "Goldilocks balance", a description vividly depicting an ideal situation where the economy is neither too hot nor too cold. However, beneath this seemingly stable appearance, a series of complex and subtle economic dynamics are quietly driving the market in a new direction, especially the cryptocurrency Bitcoin, whose price has soared above $121,000, attracting widespread attention and discussion.

Tariff driven trade flows, as an important variable in the current global economic landscape, are influencing the market in a complex way. On the one hand, the increase in tariffs may lead to the rise of trade barriers, suppress international trade activities and put pressure on economic growth. On the other hand, the uncertainty of tariffs has also prompted investors to seek safe-haven assets, and cryptocurrencies like Bitcoin, due to their decentralized and highly liquid characteristics, have gradually become the choice of some investors. The increase in this safe-haven demand undoubtedly provides impetus for the price rise of Bitcoin.

Meanwhile, high Treasury spending has become another key factor driving up the price of Bitcoin. To counter the economic shock brought about by the epidemic, the US government implemented large-scale fiscal stimulus policies, which led to a rapid expansion of the national debt. High spending on national debt not only increases future fiscal pressure but also alters market expectations for monetary policy. Investors generally expect that in order to control the debt level, the Federal Reserve may take interest rate cut measures in the coming years. This expectation of interest rate cuts has reduced borrowing costs, enhanced market risk appetite, and further driven the rebound of risky assets such as Bitcoin.

However, it is worth noting that despite the soaring price of Bitcoin, this increase is not without risks. Firstly, although the uncertainties of government bond payments and tariffs provide positive factors for Bitcoin in the short term, in the long run, these factors may trigger broader economic fluctuations, thereby having a negative impact on the price of Bitcoin. Secondly, the Bitcoin market is highly speculative, and its price is easily influenced by various factors such as market sentiment and regulatory policies, resulting in significant volatility. Therefore, investors need to carefully assess risks when participating in Bitcoin trading.

Furthermore, the view mentioned by analyst Koh that "a strong economy means inflation concerns are no longer an issue", although to some extent reflecting the current state of the US economy, remains controversial as to whether the inflation problem has truly been resolved. In fact, high national debt spending and continuous fiscal stimulus policies may lead to an increase in long-term inflationary pressure, thereby posing a threat to economic stability. In this case, although Bitcoin is attractive as a tool to hedge against inflation, its long-term effect remains to be seen.

Steve Gregory, an advisor at cryptocurrency exchange vTrader, mentioned the phenomenon of "a surge in bullish demand for Bitcoin with an exercise price of $130,000", which further indicates the market's optimistic expectations for the future trend of Bitcoin. However, whether this optimism can be supported by the fundamentals still needs time to be verified. After all, the price of the Bitcoin market fluctuates greatly. Investors need to make rational judgments and avoid blindly following the trend.

Finally, it is worth noting the impact of the continuous inflow of ETF capital and the significant increase in open interest of derivatives on the price of Bitcoin. These market indicators are usually regarded as reflections of investor confidence and market activity, and their changes may foreshadow the future trend of Bitcoin prices. However, when analyzing these indicators, investors should make a comprehensive consideration by taking into account multiple factors such as the macroeconomic environment, policy orientation, and market sentiment.

To sum up, the US economy is in a state of "Goldilocks balance", and the soaring price of Bitcoin is the result of the combined effect of multiple economic factors. Although the Bitcoin market shows an optimistic trend in the short term, investors still need to remain vigilant, view market fluctuations rationally, and carefully assess investment risks. What role cryptocurrencies like Bitcoin will play in the future economic landscape remains to be seen.