Bitcoin has been on a notable ascent recently, climbing approximately 4% over the past week. While this uptick brings cheer to cryptocurrency enthusiasts, it also signals potential turbulence in the broader economy. As traders and investors navigate this complex landscape, the question remains: Is Bitcoin’s rise a bullish sign for crypto, or a bearish omen for the economy?
Economic Clouds Loom
The recent rally in Bitcoin’s value coincides with mounting concerns about the U.S. economy. Last week, key economic indicators painted a rather bleak picture, prompting speculation that the Federal Reserve might cut interest rates soon. This speculation stems largely from disappointing U.S. jobs data revisions and stubborn inflation trends.
Just last Thursday, data revealed that the U.S. Consumer Price Index (CPI) headline rate was slightly higher than expected, suggesting that inflation might be more persistent than previously thought. Earlier in the week, revisions to job data showed that the U.S. economy had created nearly a million fewer jobs in the year ending March than initially reported—marking the largest downward revision in the country’s history. Adding to the gloom, the Bureau of Labor Statistics reported that the U.S. added a mere 22,000 jobs in August, with unemployment inching up to 4.3%. Initial jobless claims also surged, reaching the highest level since October 2021.
These figures have rekindled fears of stagflation, a dreaded economic scenario characterized by stagnant growth and rising inflation. Amid these uncertainties, Bitcoin, often viewed as a risk asset by Wall Street, has continued its upward trajectory.
Bitcoin’s Resilience Amid Market Uncertainty
Bitcoin’s rise to $116,000 last Friday—nearly closing the CME futures gap at $117,300 from August—reflects its resilience amid economic jitters. This isn’t entirely surprising, as traders are increasingly turning to riskier assets like equities and cryptocurrencies in hopes of a rate cut. The S&P 500 index, for example, recently closed at a record high for the second consecutive day, buoyed by optimism over potential monetary easing.
For chart enthusiasts, Bitcoin’s price action remains constructive. With higher lows forming from the September bottom of $107,500, the digital asset appears to be on a bullish trajectory. The 200-day moving average has climbed to $102,083, while the Short-Term Holder Realized Price—a key support level in bull markets—has reached a record $109,668.
Mixed Signals from Bitcoin-Linked Stocks
While Bitcoin’s weekly performance has been positive, the same can’t be said for all Bitcoin-linked stocks. Strategy (MSTR), the largest of the Bitcoin treasury companies, saw its shares remain flat for the week. In contrast, its rivals, MARA Holdings (MARA) and XXI (CEP), posted gains of 7% and 4%, respectively.
Strategy (MSTR) has underperformed Bitcoin year-to-date, struggling to breach its 200-day moving average, currently at $355. The company’s shares closed at $326 on Thursday, testing a crucial long-term support level seen back in September 2024 and April 2025. Meanwhile, the company’s modified net asset value (mNAV) premium has compressed to below 1.5x when considering outstanding convertible debt and preferred stock, or roughly 1.3x based on equity value alone.
Preferred stock issuance remains subdued, with only $17 million tapped across STRK and STRF this week, indicating that most at-the-money issuance is still flowing through common shares. A silver lining for Strategy (MSTR) is the recent listing and trading of options for all four perpetual preferred stocks, a development that could potentially provide additional yield on the dividend.
Bullish Catalysts on the Horizon?
Looking ahead, there are potential bullish catalysts for crypto stocks. The CME’s FedWatch tool suggests that traders are anticipating a 25 basis-point U.S. interest-rate cut in September, with a total of three rate cuts expected by the end of the year. This outlook signals that risk sentiment might tilt back toward growth and crypto-linked equities.
Further supporting this sentiment, the 10-year U.S. Treasury yield briefly dipped below 4% this week. However, the dollar index (DXY) continues to hold multiyear support, which could serve as a critical inflection point in the coming weeks.
In conclusion, Bitcoin’s recent climb amidst economic uncertainties presents a complex narrative for traders and investors. While the digital asset’s resilience and potential monetary easing offer bullish prospects for the crypto market, the underlying economic challenges cannot be ignored. As the situation unfolds, market participants will need to weigh these factors carefully, balancing optimism with caution in their investment strategies.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
