High US Consumer Debt: What it Means for Bitcoin Price?28. August 2023
- Cointelegraph analyst Marcel Pechman breaks down US consumer debt and why it might benefit Bitcoin price.
- According to JPMorgan, consumers have spent all of their pandemic-era savings.
- The Chinese central bank is intervening after the yuan hit a 16-year low against the USD, but this intervention has its limits.
US Consumer Debt and Bitcoin Price
On the latest episode of Macro Markets, Cointelegraph analyst Marcel Pechman looks into United States consumption and auto-loan/credit card balance delinquencies. According to Pechman, US consumers built up extra cash savings during the pandemic as the government injected money into the economy and temporarily forgave student loan repayments. However, investment bank JPMorgan revealed that these excess savings have been fully spent. Despite this, Pechman does not recommend betting against the S&P 500 due to upcoming inflation and potential government liquidity injections.
Pechman then shifts his focus to China’s central bank intervention after the yuan hit a 16-year low against the U.S. dollar. He believes that there is a risk of markets doubting China’s ability to sustain a stronger yuan if People’s Bank of China’s reserves aren’t enough to maintain desired levels—making their intervention risky in essence. For now though, there doesn’t seem to be any imminent danger from the yuan but it is still important to watch out for it.
Benefits for Bitcoin Price?
Ultimately, will high consumer debt in America result in benefits for Bitcoin price? According to Pechman’s analysis on Macro Markets, it could lead to positive outcomes for BTC depending on how different economic scenarios play out—especially if inflationary pressures increase and government liquidity injections become necessary.
Where To Watch?
For more insights into these matters, tune in to the latest episode of Macro Markets , available exclusively on Cointelegraph Markets & Research YouTube channel .