Research: Is Bitcoin Price Depends on FTX Developments?

The bankruptcy of FTX and related developments had a huge impact on the price of Bitcoin. According to a study, the FTX event affected the Bitcoin price much more than other macroeconomic conditions such as interest rate hikes.

Messari research analysts Sami Kassab and Chris Collar announced in their “State of Bitcoin Q4 2022” report published on February 10 that the stock market crash caused a 25% drop in the price of Bitcoin. The report highlighted that changes in the federal funds rate have a much smaller impact on Bitcoin price, even after increases of 75 and 50 basis points. It was also noted that active wallets increased by 2% compared to the previous quarter, as Bitcoin moved from central exchanges to personal wallets during this period.

On the other hand, a study published by the Federal Reserve Bank of New York earlier this week came to a similar conclusion. The February 8 article examined the links between macroeconomic news and Bitcoin price and found that inflation was the only variable that had a significant impact on Bitcoin price.

Research analysts Gianluca Benigo and Carlo Rosa, authors of the paper, compiled data from January 2017 to December 2022 to examine the impact of macroeconomic news on various asset classes. Many macroeconomic news categories were considered in the study, including inflation, the real economy, monetary policy news, and forward-looking indicators. Expressing surprise at their findings, the authors concluded that:

“The most important result is that unlike other US asset classes, Bitcoin is vertically proportional to monetary and macroeconomic news. This disconnect is surprising as unexpected changes in rates should affect the price of Bitcoin even when we interpret Bitcoin as a purely speculative asset.”