Silicon Valley circles have long viewed Dorsey as the next Steve Jobs because his tech powers are in the same league. Twitter has changed the world and Dorsey’s Square Payments company’s CashApp was a very early corporate innovator in Bitcoin.
Way back in 2019, CashApp started offering BTC custody services that account holders could buy with their credit card. Overnight, its users began doing on a smaller scale precisely what has made MicroStrategy (now Strategy) a Wall Street sensation more lately.
Today, Square is named Block. Its shares just plunged by 20% to start off May. Dorsey warned investors of turbulent times for the US consumer strength. Ironically, while that’s not good news for Block’s business model, it could be the catalyst that drives Bitcoin’s price to $1 million.
Consumer Weakness to Spur Fed Rate Cut?
After Block’s earnings report, the CEO of one of the largest payment processing apps in the world said consumer spending has shifted dramatically.
“This coincided with inflows coming in below our expectations. During the quarter, non-discretionary Cash App Card spend in areas like grocery and gas was more resilient, while we saw a more pronounced impact on discretionary spending in areas like travel and media. We believe this consumer softness was a key driver of our forecast miss.”
The cutbacks on spending drove lower sales in Q1, which saw the US economy shrink for the first quarter in three years. If it happens for a second quarter in a row, it meets the most commonly used definition of a recession by formal economists.
As a result, the central bank is apt to cut interest rates to get business going again. A CNBC survey finds rate cuts likely this year due to the wobbling economy.
That could be what launches BTC prices again to the $1 million level, as Dorsey has previously predicted.
Dorsey Forecasts $1 Million BTC by 2030
When the Fed cut rates in 2007-08, Bitcoin started operating for the first time. During the ensuing multi-year low interest rate regime, BTC prices soared from thousandths of a penny to $20,000 by Dec. 2017.
By then, the Fed had raised rates again, and Bitcoin’s price had crashed. It began to recover after the Fed slashed rates again in 2020 and soared to a new record high of $69,000 by Nov. 2021.
The landscape seems rather similar now, but BTC’s price is actually well above $100,000 even after the Fed’s third consecutive refusal to lower the rates.
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