How the increase in US GDP will influence Bitcoin

Tax risk and fall in interest rates may serve as incentives for investment in Bitcoin

The US GDP grew 33.1% in the third quarter, even in an atypical Pandemic year. In the quarter by quarter comparison, this means a growth of 7.4%. An excellent news for Donald Trump who will dispute the election next Tuesday, November 3. Considering the collapse in the second quarter, this means that the level of real GDP is still 4.5% below its peak.

With the increase of the GDP in the USA and the consequent devaluation of the dollar against Bitcoin Bonanza, an average investment opportunity will arise for investors who will seek in Bitcoin greater profitability and refuge from fiscal and inflationary risk. This premise will be valid both for the USA and for Brazil.

Taking into account current GDP estimates, the US GDP will probably reach a new peak in the last quarter of next year, closing a cycle of monetary expansion and public spending, which at some point will be charged to the stimulus account of more than $1 trillion released last quarter and another $5 trillion being released by the Federal Reserve (Fed) to keep the economy warm. By the numbers presented in the GDP, the stimulus worked.

With everything that happened as a result of Covid-19, one can say that the result of the US GDP is quite impressive and is in line with the result presented by China, which was in the order of 4.9%. This shows that the close cooperation of fiscal and monetary stimulus has been effective, probably avoiding an environment similar to the depression followed by the 2008 crisis.

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The latest data also increases Trump’s chances of being re-elected, although he is way behind in betting odds and research. But it was the same in 2016. What’s also surprising is that if you give people money, they will spend it – even with unemployment reaching historic levels, both in the US and Brazil, which already represents 13.3% of unemployed people, according to data released by Ipea.

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Personal consumption grew more than 40% (annualized) in the third quarter. This is a very impressive multiplying effect. So, although we are not out of danger yet – we need a vaccine to get there – things don’t look so bad compared to six months ago. Even the most fragile economies, like Brazil’s, but which was warmer before the Pandemic, the results of the Brazilian GDP in the last quarter, of the order of 5.8%, a better result than expected by the IMF, which was of the order of 9.1%.

A global crisis, but with local results

The Pandemic crisis affected all countries and their economies, each responding to the challenge according to the instruments that their governments and companies had available. The fact that stock exchanges and stock markets show expressive numbers of appreciation ignores the real numbers of the microeconomy, which concern the small neighborhood cafeteria, which closed, while in the macroeconomic aspect, the numbers presented by Starbucks are of growth in the same period. The shares of the coffee chain, valued at US$ 116 billion, have increased 50% so far this year.

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Increase in US GDP represents an opportunity for Bitcoin

Both countries continue with increasing fiscal risk and low interest rates, creating an environment in which the search for assets with more risks, such as the stock market, or the cryptoactive market, become preferential options for those seeking more profitability.

3. November 2020