Jack Dorsey, the Twitter guy turned Block boss, is sounding the alarm. He’s telling investors, consumer spending is tanking.
Now, that sounds like bad news for most businesses, especially his own. Block’s shares just took a hit, down 20% right out of the gate this May.
But this consumer slowdown might just be Bitcoin’s golden ticket to the moon, like, $1 million per coin kind of moon.
Tightening the belt?
You see, Dorsey’s not your average tech mogul, because people have been calling him the next Steve Jobs for years, and with good reason.
Twitter changed how we talk, and his Square payments app, now rebranded as Block, was one of the first big players to jump on Bitcoin.
Back in 2019, CashApp started letting users buy Bitcoin with credit cards. Suddenly, everyday people were doing what big Wall Street players like MicroStrategy have been hyping up, buying and holding Bitcoin like it’s the future.
But after Block’s latest earnings, Dorsey spilled the beans, and told people are cutting back on the fun stuff, travel, media, you name it.
But essentials like groceries and gas? Those are hanging tough. This shift crushed Block’s sales in Q1, and guess what?
The U.S. economy shrank for the first time in three years. If that slump sticks around for another quarter, boom, we’re officially in a recession.
History
Now, recessions usually mean the Federal Reserve steps in with rate cuts to juice the economy. And history?
It’s got a thing or two to say here. When the Fed slashed rates during the 2007-08 financial crisis, Bitcoin was just starting out.
As rates stayed low for years, Bitcoin’s price exploded, from practically nothing to $20,000 by the end of 2017.
Then the Fed hiked rates. Fast forward to 2020, the Fed cut rates again, and Bitcoin jumped to nearly $ 69,000 in late 2021.
Patterns
The Fed’s been stubborn about keeping rates high, but with consumer spending wobbling and the economy shrinking, a rate cut might be just around the corner out of neccesity.
And if history repeats itself, Bitcoin could be gearing up for another rocket ride, and Dorsey’s bold prediction of $1 million by 2030 suddenly doesn’t sound so crazy.
Sure, Block’s business is hurting now, but sometimes, you gotta break a few eggs to make an omelet, or in this case, to send Bitcoin to the stratosphere. So, buckle up!
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