Market Strategist Predicts 32% Stock Market Crash, How Will This Affect Crypto?
13 July 2024 - 6:30AM
NEWSBTC
Peter Berezin, chief global strategist at BCA Research, has
predicted that the stock market will experience a significant crash
by 2025. His prediction is noteworthy, given the impact that a
decline in the stock market could have on the crypto market. Market
Expert Predicts 32% Crash In Stock Market Berezin mentioned in an
interview that the S&P 500 will decline by 32% and drop to
3,750 by next year. He explained that this downtrend would occur
due to a recession in the US, which he predicts could happen at
year-end or early 2025. He claimed that the reduction in consumers’
spending is already hinting at this recession as households have no
savings to spend and banks are tightening their lending standards.
Related Reading: Cardano Sees 1,218% Spike In This Major Metric,
Will ADA Price Follow? Berezin also alluded to the rising
unemployment rate, which he noted shows that the labor market is
weakening and hints at an imminent recession. The market strategist
warned that the Federal Reserve’s tightening monetary policy will
make matters worse as the Central Bank continues to “drag its feet”
in cutting interest rates. A potential decline in the stock market
could negatively impact the crypto market, given Bitcoin’s strong
positive correlation with the S&P 500 at times. Whenever this
happens, Bitcoin’s price, and by extension, the broader crypto
market, is known to move in the same direction as the stock
market. Furthermore, based on Berezin’s analysis, a recession
could have the same impact on the crypto market since consumers
will have less to invest in Bitcoin and altcoins, which could cause
trading volumes to dry up and lead to price declines for these
crypto tokens. The crypto market has also shown that it is not
immune to macroeconomic factors, considering how it has reacted to
the Fed’s decision not to reduce interest rates just yet.
Some Positive For Bitcoin And The Crypto Market The US June
Consumer Price Index (CPI) inflation data was released on July 11.
It provided a positive for Bitcoin and the crypto market, showing
that the inflation rate dropped by 0.1% from May and put the annual
rate at 3%, the lowest over three years. This development has
further strengthened the call for the Fed to cut interest rates, as
inflation is cooling off in the country. Related Reading:
Analyst says Ethereum Will Reach $8,000 ATH, But This Needs To
Happen First A cut in interest rates would boost investors’
confidence in investing more capital in risk assets like Bitcoin
and other cryptocurrencies. Meanwhile, there is the belief that the
Fed could cut interest rates by September if the monthly inflation
data continues to show that inflation is slowing in the
country. At the time of writing, Bitcoin is trading at around
$57,000, down almost 2% in te last 24 hours, according to data from
CoinMarketCap. Featured image created with Dall.E, chart from
Tradingview.com
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