- Bitcoin price fell almost 3% due to economic uncertainties in the US
- Darius Dale believes inflation concerns are currently impacting asset markets
Bitcoin [BTC] is in the headlines again after its price fell almost 3% in a single day, settling at $69,134 at press time. This is against the background of the uncertainty associated with the economic scenario of the United States, which is expected to soon enter the “no landing” zone.
In a recent conversation with Anthony Pompliano, Darius Dale, founder and CEO of 42Macro, discussed the dire economic situation and its impact on Bitcoin. According to Dale,
“We will continue to see flawless disinflation over the next few quarters, but by the fourth quarter we will most likely have bottomed out.”
He added,
“As for inflation not being consistent with the Fed's 2 percent target, we think that will likely cause some problems for asset markets.”
Sticky inflation and its impact on Bitcoin
The debate about soft landing, hard landing and no landing is not new. Regarding the current scenario, Dale emphasized that “No Landing” refers to economic growth that is in line with or above trend, slowing inflation but falling short of the 2 percent target.
The lack of clear economic development has exacerbated the downtrends in the crypto sector, which is why there are now many red candles on several price charts. Additionally, investors in both the cryptocurrency market and Wall Street are skeptical of the Federal Reserve's forecast of three interest rate cuts in 2024, despite signs of resilience in the US economy.
Dale echoed similar sentiments, stating:
“In our view, markets are moving in the right direction in terms of pricing rate cuts and pricing in volatility in fixed income markets, but sparing markets for risk assets such as stocks, credit and cryptocurrencies, given this is a resilient economy, that does this.” does not simply require money.”
He further noted:
“The decline in crypto prices is, in my opinion, a flawed assumption that is inconsistent with market history. There is a long market history of reflation regimes and our customers are currently using the current system.”
The way forward
Dale's opinions illustrate that the crypto market is going through a new cycle, driven by the launch of spot Bitcoin ETFs and the upcoming Bitcoin halving.
Despite SEC approval, these ETFs have faced challenges, as evidenced by recent net outflows of negative $233.8 million. Therefore, despite mixed signals on disinflation, investors remain optimistic about the upcoming BTC halving.
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