The cost of cryptocurrencies, as well as other risky assets, very much depends on the availability of funding – funds for active speculation. The fall of the cryptocurrency and stock markets began simultaneously for a reason: since autumn, investors have begun to lay down the tightening of the Fed’s monetary policy under the guise of fighting inflation and, as a result, raising the cost of loans. Thus, everything that we have seen in recent days is simply a consequence of the withdrawal of available capital from the market.
A recent report on spending by the US population indicates a reduction in demand: the growth rate of the indicator decreased for the first time since the beginning of the year from 4.9% to 4.7%. Banks reacted immediately and began to lower their forecasts for the American economy, for example, Morgan Stanley (NYSE:MS) now expects growth in the second quarter not by 2%, but only by 0.3%. In other words, the probability of a recession in the country is increasing, while the chances that the rest of the world will be able to ignore the problems of Americans are extremely small.
We expect a decrease in the cost of bitcoin to $ 17 thousand.
In such conditions, the demand for cryptocurrencies will remain at a low level, which means there will simply be no forces for the growth of quotations.