- Bitcoin’s price dropped by almost 3% amid U.S economic uncertainties
- Darius Dale believes that inflation worries are impacting asset markets right now
Bitcoin‘s price took a dip of nearly 3% in one day, reaching $69,134 as reported currently. This news comes amidst the economic uncertainties surrounding the US, which may approach a recession in the near future.
In a recent chat with Anthony Pompliano, Darius Dale, the Founder and CEO of 42Macro, shared his concerns about the current economic crisis and how it might influence Bitcoin. As Dale explained,
Over the next few quarters, there will be persistent price drops without inflation, leading us to reach a low point around Q4.
He added,
In terms of inflation exceeding the Federal Reserve’s 2% goal, we believe this could lead to issues for various financial markets.
Sticky inflation and its impact on Bitcoin
The discussion about soft landings, hard landings, and no landings in the economy is nothing new. In relation to the current situation, Dale pointed out that a “No Landing” signifies economic expansion at or above the average rate, yet still falling short of the 2% inflation mark.
The crypto market has seen a increase in downturns due to the lack of a defined economic path, resulting in numerous red indicators on price charts. Furthermore, investors in both crypto and traditional markets are uncertain about the Federal Reserve’s forecast of three rate cuts by 2024, despite hints of economic strength in the US.
Echoing similar sentiments, Dale elaborated,
From our perspective, the financial markets are showing signs of adjusting appropriately by pricing in anticipated rate hikes instead of cuts, factoring volatility into bond markets, but allowing risk assets like stocks, credits, and cryptocurrencies to continue their growth trajectory. This robust economy does not depend on monetary easing.
He further noted,
In my perspective, the decrease in crypto prices is an incorrect presumption that contradicts historical market trends. Our clients, however, are effectively leveraging the current reflationary regime, as evidenced by past market history.
The way forward
The views expressed by Dale indicate that the cryptocurrency market is entering a fresh phase, fueled by the debut of spot Bitcoin ETFs and the approaching Bitcoin halving event.
In spite of getting the SEC’s approval, these ETFs have encountered difficulties, as indicated by recent net losses totaling -$233.8 million. Yet, there are conflicting signs regarding disinflation, but investors remain hopeful about the upcoming Bitcoin halving event, which keeps their optimism alive.
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2024-04-10 12:07