Bitcoin Cools but Analysts Remain Upbeat. Why?

Bitcoin experienced a decline of over 3% after reaching a record high of $126,080, dropping to around $122,071. Despite the pullback, analysts express optimism about Bitcoin's future, predicting that it could surpass $140,000 by the end of the year. This sentiment is attributed to increasing concerns regarding the U.S. dollar's stability amid economic upheaval and the ongoing rise of inflation. Both Bitcoin and gold are being favored as stores of value as investors seek alternatives against a potential economic downturn. Analysts, including Gerry O'Shea from Hashdex Asset Management, note that Bitcoin's appeal as a digital safe haven is growing due to rising U.S. fiscal deficits and a decline in real interest rates. Additionally, institutional inflows and rising exchange-traded fund holdings indicate an increasing acceptance of Bitcoin as a hedge against currency debasement, further solidifying its position in the financial landscape.

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