Crypto market: 63% of traders expect the worst
According to Charles Schwab’s latest investor sentiment survey, 90% of traders fear an economic recession in the United States, and 74% believe it will begin this year.
According to the survey, the possibility of an impending recession is now the biggest concern for 18% of retailers, up 6% from the previous quarter. Additionally, 63% of investors are pessimistic about the future of crypto markets and meme stocks (actions of companies that attract the attention of virtual communities).
Traders fear recession
The survey also revealed that few traders intend to buy cryptocurrencies. However, please note that the survey is only for experienced investors.
On the other hand, an overwhelming majority (69%) believe the recession will last a year or less, and only one in five people have withdrawn their funds from the stock market to protect themselves from a market downturn. It should be noted here that while the correlation between stocks and cryptocurrencies has peaked this year, the latest report from research firm Kaiko reveals that Bitcoin’s continuing correlation with bonds and the Nasdaq has fallen to a three-month low. This indicates that the crypto market is gradually (temporarily?) separating from traditional markets.
Barry Metzger, head of trading and education at Charles Schwab, said: “The good news is that traders across generations are confident in their ability to navigate difficult markets, which speaks to their state of mind and access to exceptional tools, resources and training that will help them develop trading strategies and make decisions”.
However, inflation remains the biggest concern for traders when it comes to money and investing (21%). However, nearly 79% of them expect inflation to fall by the end of 2023. Most traders also predict that the Fed will gradually reduce interest rate hikes over the next few months, the coming months of the year.
Note that the Consumer Price Index report found that US inflation fell to 8.5% in July. News that had a positive impact on the crypto market.
BTC: Inflation Hedge?
During an interview with Fortune, Edward Moya, senior market analyst at Oanda, argued that the inflationary trend could be beneficial for Bitcoin.
“I think that by the end of the summer, the development of inflation and the Fed’s decisions will determine the direction that Bitcoin will take. Bitcoin is currently still highly correlated with stocks, especially the Nasdaq,” Moya points out, noting that “this [dernier] the inflation report confirmed the idea that the Fed will not need to be as aggressive in its tightening policy going forward”.
Steven Lubka, CEO of Swan Bitcoin, previously stated that Bitcoin can act as a hedge against inflation, but only under certain conditions. Mr. Lubka explained that while some sources of inflationary pressure, such as quantitative easing, can be avoided with Bitcoin, others, such as supply chain disruptions, are less so.
In the last 24 hours, bitcoin has fluctuated between $23,559.63 and $24,931.30. According to data from CoinGecko, the asset rose by 2% on the day.
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