Bitcoin traditionally responds well to economically stimulative environments. When the Central Banks are stimulating the economy through interest rate cuts or through QE, bitcoin tends to respond well as it is a form of hard money (fixed supply). The regime that we are in now is undecided between an economic growth scare, whereby rate cuts will end up fueling the economy and growth picks back up again, or a true economic slowdown where the unemployment rate begins to accelerate. An economic growth scare would be a more positive backdrop for the markets and for bitcoin, whereas an economic slowdown would likely put downward pressure on the markets in the near term.
Bitcoin is a highly volatile asset, and while its price has been chopping around between $50K and $70K over the past six months, a drop to $30K or $40K is quite possible, particularly with further economic weakness without an immediate Central Bank response.
Part of its near-term performance hangs on the outcome of the election, as Trump has publicly endorsed the asset class, which would be a regime change from the current administration.
While we cannot personalize responses, with its history of volatility and price declines, due to high levels of uncertainty, we feel that paying off debts can take priority as large swings in bitcoin can occur. An investor can also take a staggered approach, where part of one's position is used to pay off debts, while the rest is held onto. We like the long-term prospects of bitcoin, but one should not invest what one cannot afford to lose or will need in the near-term.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in BTCC.B, IBIT.