Bitcoin’s price might be on the verge of falling below $60,000, according to notable crypto hedge fund manager Quinn Thompson from Lekker Capital. In a recent discussion, Thompson expressed that various economic factors, including government spending cuts, tariffs, and new immigration policies, could contribute to this potential decline in value over the coming months.
Key Points:
- Economic Policies: The Trump administration’s approaches to slashing the deficit are considered detrimental to risk-on assets, notably Bitcoin.
- Market Outlook: Thompson asserts that the downturn for Bitcoin and other cryptocurrencies might mirror the sharp declines faced in 2022.
- Long-Term View: He projects that Bitcoin could potentially settle between $50,000 and $59,999 before the year ends.
“I could see us going back to a five handle by the end of the year,” states Thompson.
Translation: “I could see us going back to a five handle by the end of the year.” Thompson believes the adjustment won’t be swift but a gradual process that will likely frustrate investors.
Economic Headwinds:
- D.O.G.E. Spending Cuts: These budget reductions could disrupt consumer spending, a major growth driver in recent years.
- Immigration Impacts: A decrease in immigration may lead to a tighter labor market, resulting in rising wages and employment costs.
- Tariff Uncertainty: Fluctuations in tariffs introduce unpredictability for businesses, potentially delaying investments.
- Federal Reserve Stance: The Fed’s cautious approach to monetary policy could hamper economic recovery, especially as inflation concerns persist.
Thompson concludes that unless significant changes occur, the outlook for Bitcoin looks bleak as the government continues to maintain its course, possibly leading to a recession as elections approach.
