Bitcoin’s Price Decline Predicted Amid Economic Headwinds by Quinn Thompson
Quinn Thompson from Lekker Capital forecasts a gradual decline in Bitcoin’s price, potentially reaching $50,000-$59,999 by year-end. He attributes this to Trump administration policies that will hinder economic growth and support for risk assets. Factors include cuts in government spending, immigration policy changes, tariff uncertainties, and Federal Reserve inaction. He predicts a tough market for both Bitcoin and broader assets throughout 2025, unless significant political changes occur soon.
Quinn Thompson, founder of Lekker Capital, posits that the Bitcoin price may continue to decline slowly over the coming months, citing several economic factors. Notably, he mentions that policies from the Trump administration aimed at reducing the deficit will adversely affect risk-on assets such as Bitcoin. According to Thompson, this erosion will not be swift but rather a frustrating prolonged decline.
Thompson warns that Bitcoin could drop to a price between $50,000 and $59,999 by year-end, which would be approximately a 50% decrease from its recent peak of over $109,000. He anticipates that this decline will not be volatile with large liquidations but will manifest as a steady, painful market downturn. He describes this slower descent as potentially more distressing for investors, as uncertainty regarding market bottoms prevails.
Furthermore, Thompson elucidates four significant economic headwinds stemming from the Trump administration’s policies that may impact the economy negatively. Firstly, the Department of Government Efficiency (D.O.G.E) intends to cut government spending, which has historically supported job growth and consumer spending. Secondly, a crackdown on illegal immigration could lead to labor shortages, pressuring wages and causing businesses to reassess hiring practices.
The ongoing tariff threats from the Trump administration contribute to economic uncertainty; businesses may postpone crucial investments and hiring decisions due to unpredictable tariff outcomes. Lastly, Thompson emphasizes that the Federal Reserve is unlikely to lower financial conditions promptly, which may inhibit market performance. Though Thompson predicts modest cuts in interest rates in 2025, he believes these actions will be too late to spur significant recovery.
In light of these factors, Thompson suggests that risk-on assets, including Bitcoin, may face a challenging year ahead. He expresses skepticism regarding the White House’s acknowledgment of a potential recession, suggesting that current fiscal policies aim to temper asset prices, possibly leading to a decreasing stock market.
Thompson concludes that unless there is significant pressure from Trump’s political base, or midterm elections prompt changes, he expects the current economic strategies will continue until at least early 2026, indicating a prolonged struggle in markets.
Overall, Thompson’s insights reflect a cautious outlook for Bitcoin and broader economic conditions amid shifting political and fiscal landscapes.
Quinn Thompson of Lekker Capital provides a sobering forecast for Bitcoin and the cryptocurrency market, attributing its downward trajectory to multiple economic challenges stemming from current U.S. governmental policies. His analysis highlights a slow, painful market decay influenced by fiscal restraints, labor market shifts, tariff uncertainties, and Federal Reserve actions. Investors may need to prepare for a prolonged period of market adjustment, aligning closely with Thompson’s insights regarding economic conditions and their impacts on Bitcoin and risk-sensitive assets.
Original Source: www.coindesk.com
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