It is an uncertain time in the cryptocurrency market, as economic recession lingers on the horizon. July is seen as a key month, where the stock market and the commodity market could well be influenced by federal tightening and deflation respectively. Mike McGlone of Bloomberg Intelligence notes that cryptocurrencies could be hit by headwinds depending on these upcoming changes. The Nasdaq 100 and Bloomberg Galaxy Crypto Index have both seen steep gains since the end of 2017, however, may be susceptible to quantitative tightening of liquidity. McGlone further cautions that the BGCI may increase by up to 50% this year, however, soft landing won't be a sure thing if an elongated economic contraction is experienced. Federal funds rate is still rising, which demonstrates that the impact of withdrawing the stimulus is yet to come. Therefore, this unique situation makes it an uncertain time for cryptocurrency and investors must be wary of the potential obstacles these different factors may create.
Maria Anderson
- 2023-05-07
Crypto Market Faces Uncertain Times Ahead
July could mark a decisive moment in the crypto market, with crypto assets potentially hit by headwinds if the stock market and commodity market see federal tightening and deflation respectively. Mike McGlone of Bloomberg Intelligence cautions investors to be wary of the potential obstacles as the US federal funds rate is still rising.
