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Anticipating Global Economic Shifts: Implications for Cryptocurrency

Just some takeaways:

  • Cryptocurrency regulation begins in Europe in July, and it is expected that the United States and other countries will also introduce similar policies. Intensifying efforts around July could be a short-term bearish factor for cryptocurrencies.

  • The probability of halting interest rates within this year is small, and the market generally expects a rate cut within the year. The earliest possibility may be in September, but there will be significant fluctuations within the first month of the rate cut.

  • The United States does not want the Ukraine-Russia war to cease and wants more countries to get involved so that it can continue to reap benefits. War means a higher demand for liquidity, and the obstruction of resource transportation leads to increased inflation.

  • Stimulating the economy still requires liquidity. The current scale-back by the Federal Reserve is minimal, and the market liquidity can still support high market values. However, most of the funds are in a wait-and-see state, and the market is waiting for a clear signal.

  • Oil prices are falling, the economy is in recession, and electric vehicles are taking over the market. The decline in energy prices is beneficial for inflation.

  • It can be predicted that bank failures will still occur, which currently seems favorable for cryptocurrencies.

  • U.S. inflation is at 4.9%, marking a 10-month consecutive decrease, and interest rates are already higher than actual inflation. The crossover of the two will lead to a decrease in inflation. It can basically be confirmed that there will be no further interest rate hikes, which is favorable for cryptocurrencies.

  • There is an intense internal struggle in the United States. Trump is pressuring for change, and the debt ceiling issue must be resolved by the end of May. The final result is the Federal Reserve raising the ceiling, which is short-term favorable for cryptocurrencies.

  • The world is just beginning to de-dollarize - a weak U.S. dollar is beneficial for cryptocurrencies, but this is just the beginning and the effect will not be significant.