Confidence in a post-pandemic future contributed to the reactivation of all economic sectors in the United States in 2021. The market capitalization of cryptocurrencies has grown by more than 61% this year.
There could be a reaffirmation of the narrative of Bitcoin as the digital gold in 2022. The balance sheet of the US Federal Reserve will experience dramatic growth, which will lead to injecting liquidity into the economy.
The COVID-19 pandemic caused 2020 to be one of the most volatile years in the history of the economy. That situation negatively impacted the conditions for job creation and supply chains, giving way to fiscal policies due to the growing inflation. However, confidence in a post-pandemic future has fueled the recovery in all sectors of the economy this year.
The difference in yields on 10-year and 2-year Treasury bonds (T10Y2Y) allows predicting recessions or sharp downturns in the economy. Shortly after that indicator has turned negative, there have been recessions.
The trend rose throughout 2020 but began to decline in March 2021. That indicator is currently at 0.80, above 0.25, which indicates that investors expect future growth.
Quarterly Analysis of the US Economy in 2021
Government aid programs for homes and businesses contributed to economic recovery in the first quarter of 2021, when the GDP grew by 6.4%. Consumer sentiment rose to 85%, the average recorded in the last 20 years.
The latest round of direct aid delivery led consumer spending to rise by 10.7% in the first quarter. That quadrupled the 2.7% increase registered in the last quarter of 2020, when the unemployment rate stabilized at 6.2%.
Compared to the fourth quarter of 2020, the market capitalization and trading volumes of cryptocurrencies increased by 240% and 155%, respectively. The market capitalization went from USD 760 billion to USD 1.9 trillion at the end of the first quarter of 2021.
The GDP grew in the second quarter, the unemployment rate remained at 5.9%, and spending was higher than in the first quarter. However, the market value of cryptocurrencies declined in the April-June period, going from USD 1.9 trillion to USD 1.4 trillion, representing a decrease of 26.3%.
The COVID-19 Delta variant affected the main variables of the economy in the third quarter. The GDP grew by only 2%, while consumer spending had decreased significantly, but the unemployment rate dropped to 4.8%. The recovery of cryptocurrencies allowed the market capitalization to return to USD 1.9 trillion, the closing value of the first quarter.
For the last quarter of 2021, analysts expected an increase of 5% in GDP and 7% in consumer spending and a lower unemployment rate of 4.6%. Despite the decline in November and December, the cryptocurrency market has risen to USD 2.26 trillion.
This quarter managed to see an all-time high of USD 3 trillion in the market capitalization of cryptocurrencies in November. Less than two weeks before the end of 2021, the market capitalization of cryptocurrencies has grown 61.4%, according to CoinMarketCap.
Bitcoin (BTC) is currently trading at around USD 48,774 and has accumulated a 1% loss in the last 24 hours. Its daily trading is above USD 21.7 billion, and its market capitalization is about USD 922 billion, according to CoinGecko. The former CEO of Twitter, Jack Dorsey, recently said that the pioneering cryptocurrency would replace fiat money.
By Alexander Salazar
