Bitcoin rally could endure if US manages a soft landing

Bitcoin rally could endure if US manages a soft landing
But further tightening by the Fed could put a swift end to the crypto rally.
AUG 02, 2023
By  Bloomberg

The crypto market rebound this year could have room to run if the US economy manages to achieve a soft landing.

That’s the view of Zach Pandl, the recently appointed managing director of research at crypto fund provider Grayscale Investments LLC, who previously worked as a strategist at Goldman Sachs Group Inc. 

A scenario of low inflation and steady growth would likely aid risk assets, including crypto, by allowing the Federal Reserve to lower real interest rates, Pandl wrote in a note. But “if the central bank decides to raise real interest rates further, or if its monetary tightening to date tips the economy into recession, the crypto recovery may pause over the near term,” he said.

Many investors think the Fed’s most aggressive tightening campaign since the 1980s is close to an end as price pressures cool. That prospect helped to fuel a crypto revival earlier this year, as did optimism that the US may allow its first spot Bitcoin exchange-traded funds, but the rally has since stalled.

Ongoing regulatory uncertainty over the status of digital assets in the US and stresses in decentralized finance — or DeFi — have also hit sentiment. DeFi relies on blockchain-based software known as smart contracts, rather than Wall Street-style middlemen, to facilitate activities like trading or lending.

Pressure on the native token of key DeFi exchange Curve Finance has stoked concerns about cascading liquidations of positions throughout the embryonic sector. The coin, CRV, fell as much as 8.1% on Wednesday.

Bitcoin added just over 1% to reach $29,600 as of 8:33 a.m. in London on Wednesday, leaving its 2023 rebound from last year’s rout at 79%. The largest digital asset remains about $39,000 off its 2021 peak of almost $69,000.

MicroStrategy Inc., the largest publicly-traded holder of Bitcoin, said Tuesday it may raise as much as $750 million via share sales and use some of the proceeds to buy more of the token. 

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.