ECONOMIC RECESSION: AN OPPORTUNITY FOR THE CRYPTO MARKET
The cryptocurrency financial market represents an opportunity for all those who hope to obtain significant profits in short periods. Still, we are facing global economic situations that, although digital currencies are not regulated, are being affected. You can check out the link given below if you want to know more about such information related to Bitcoin investments.
The economic environment that reflects the United States and Europe is not at all positive because both economies are in an intense fight against rising inflation.
Even if we try to avoid qualifying it as a recession, it is inevitable not to consider it in the face of such a convulsed market; in the case of the finance and investment sector, a solution cannot be found with lukewarm cloths; it must be clear and demonstrate that recessions also they are opportunities.
How does the recession affect cryptocurrencies?
From the moment of their origin, Cryptocurrencies were considered financial instruments that the macroeconomic environment of traditional finance could not violate. Still, this reality changed and took an unexpected turn due to the inflationary crisis that world powers are currently going through.
We are facing a quite explosive economic situation where many analysts and financial specialists assume that it could be considered a new crisis due to the reports that have been issued, such as the GDP of the United States and the quarterly results of large industries and the sector of real estate.
The scenario is not encouraging for investors who have allocated their capital to try to protect the currency in an option that seemed untouchable by inflation, and this was cryptocurrencies.
Suppose we go back to the past and the crises that Bitcoin has gone through. In that case, we find that during 2008, when one of the most complex economic crises for the US was generated, it was considered a refuge asset, where its main attraction was the `possibility of carrying out transactions without the intervention of third parties.
There, cryptocurrencies began to be considered digital financial elements that could contribute to the stability of the finances and investments of many large companies of this world power.
Central banks’ control of the economy is the main factor that makes many people feel the management of their investments and remain outside the financial market.
It was thought that Bitcoin and the other cryptocurrencies were immune to the decisions made by the Central Banks and inflation. Still, this theory collapsed during the first half of the year.
Investing in the well-known digital gold is not an irrelevant option; on the contrary, many institutional investors remain looking for the changes that will come since Bitcoin could bottom. Still, when it reaches its new maximum, it could benefit considerably.
Recession equals opportunity
We are possibly facing a scenario of total denial regarding the entry of an economic recession due to how complex this is, not only for the economy that suffers directly but also because of the global effect.
A recession indicates constant inflation, which unfortunately can be uncontrollable; this is not the first time this has happened. We are facing a very different world panorama where there are rises in the price of energy, oil, and course products in general.
Several factors indicate that a recession could be starting. Among these are the employment rates, the falls in companies’ production, the increase in interest rates, and their impact on mortgage loans, which will, without a doubt, also affect the real estate sector.
All these elements, when brought together, must be considered a global scenario. If one thing must be clear, it is that opportunities always arise from crises, which is why we have recently seen how Bitcoin has responded to the measures taken by the Fed.
Analysts recently assumed that if the Fed pronounced itself with a decrease in interest rates by 0.75%, it would most likely show the rise of digital currencies; consequently, many investors would prefer to invest in this type of asset than in a medium and in the long term it can generate higher returns.
We have recently seen a change in trend regarding Bitcoin, where perhaps the crypto market is benefiting after drastic falls throughout 2022.
At this point, cryptographic investments must be evaluated very carefully; consequently, since the price rise is very recent, a reasonable time should be considered to invest since the stock and financial markets are highly vulnerable and changeable.