The Bitcoin (CRYPTO: BTC) price fell back below the psychologically important US$20,000 level over the weekend. And it's yet to recover.
At the time of writing, the world's original crypto is trading for US$19,452 (AU$30,640).
That's after BTC traded as high as US$20,408 early last Friday.
So, what's putting the Bitcoin price under pressure?
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Why is the Bitcoin price back under US$20,000 today?
Bitcoin can't seem to reliably shake its close correlation with risk assets, like high-growth tech shares.
Crypto prices broadly came under pressure on Friday after the release of an unexpectedly strong September jobs report out of the United States, which sent the NASDAQ to close 3.8% lower. The world's top economy saw unemployment fall to a 50-year low of 3.5%. And a 5% year-on-year increase in wages showed inflation is unlikely to disappear anytime soon.
In a case of good news is bad news for the Bitcoin price, the strong economic numbers mean crypto investors can expect further aggressive tightening from the US Federal Reserve in its bid to get the inflation genie back in its bottle.
Indeed, as Fed governor Christopher Waller said, "Until we see any signs of inflation beginning to moderate, I don't know how we pause."
With interest rates ratcheting up rapidly in 2022, the Bitcoin price has crashed 59% year to date.
What are the experts saying?
Chief market strategist at B Riley Art Hogan pointed to the sharp fall in money supply (M2) in the US as pressuring cryptos.
According to Hogan (as quoted by Bloomberg):
The logic would be that with the money supply, or M2, coming down, there's less money floating around that could find its way into risk assets. And clearly cryptocurrencies have proven to be risk assets over the course of the last 12-18 months. You'd suspect that would be a negative for some of the riskier edges of the investment universe.
Portfolio strategist at New York Life Investments Lauren Goodwin added that, like gold, the Bitcoin price and other cryptos aren't living up to their hype as inflation hedges.
"The reality is not so much that crypto is an inflation hedge but rather, much like gold has become, it evolves with central-bank liquidity," she said. "So the reversal of excess liquidity in the economy from the Fed and other central banks has contributed meaningfully, in my perspective, to the lower appetite for digital currencies."
So, when can crypto investors expect a sustained rebound in the Bitcoin price?
Keep an eye on those US inflation figures.
