The crypto community is looking at three macro events to tip the crypto scale in July
The crypto community is looking at three macro events to tip the crypto scale in July
If the Fed continues to raise interest rates to curb inflation, BTC could enter a full-scale recession for the first time ever
By Shashank Bhardwaj
Image: Shutterstock
The crypto community is waiting for three important dates in July that could have a huge impact on the crypto asset market and the US macroeconomic conditions this year.
The monthly consumer price index (CPI) and data related to inflation will be available to the public on 13 July. The 26th-27th July comes an important announcement about the interest rate increase, and July 28 Estimates for gross domestic product (GDP) in the US for the second quarter of 2022 will be released. These significant releases will assess whether the United States is in a technical recession.
July 13: Release Date for CPI
The KPI is due to be released on July 13 by the Bureau of Labor Statistics. According to the trading economy, the current statistics for the June inflation rate or the CPI are 8.7 per cent, which is slightly higher than maize 8.6 per cent.
Michael van de Poppe, founder and CEO of an education platform and crypto-based consulting firm, EightGlobal, tweeted that “all eyes are on the KPI data next week and the Fed,” which will add to the bullish estimates for Bitcoin if the price exceeds $ 20,000.
Wolves of Crypto (Twitter account name), co-founder of The Crypto Academy, said in a tweet: “All eyes are on CPI numbers on July 13. If CPI comes lower, it will be the catalyst for a dead cat bounce (for Bitcoin). ยป
The CPI is used to assess the size of inflation by extracting the average change in consumer prices based on a basket of household goods and services. If inflation rises further, demand for cryptocurrencies may be adversely affected.
Bitcoin was developed at a time of high inflation due to the global financial crisis in 2008 and proved to be a major inflation hedge due to its scarcity and fixed offers. In recent years, however, Bitcoin has behaved like the traditional technology stocks.
26.-27. July: Announcement of Fed rate hike
Post the meeting of the Federal Open Market Committee (FOMC) this month. Interest rates may increase more after the increase of 75 basis points in June.
Interest rate hikes are a fundamental tool used by the Federal Reserve to keep inflation in check. This can have a negative effect on cryptocurrencies as investors can divert their investments to low-risk assets or interest-bearing accounts for decent earnings.
The FOMC will decide whether to raise interest rates by 50 or 75 basis points this month. Charlie Bilello, CEO and founder of Compound Capital Advisors, tweeted higher amount expectations.
July 28: Is the recession really here?
The US Bureau of Economic Analysis (BEA) will announce a forecast for the country’s GDP for the second quarter of 2022 on 28 July. Q1 of 2022 witnessed a decline of -1.6 percent in GDP. The Atlanta Federal Reserve’s GDPNow tracks have estimated a -2.1 percent drop in GDP for Q2 2022.
Two consecutive quarters of falling GDP will bring the United States into a “technical recession”. If the US faces a recession that could begin in 2023, Bitcoin will face its first full-scale recession and may fall as technology stocks.
Despite the negative aspects of the economy, few cryptogurus see the macro-catalyzed market meltdown of cryptocurrencies as a positive event for society. Erik Voorhees, CEO and founder of ShapeShift and co-founder of Coinapult, told his followers on Twitter that the crash with cryptocurrencies was “least worrying” for him. Alliance DAO’s core contributor Qiao Wang commented that the macroeconomic state of the crypto community is an “exogenous factor.”
The author is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximist. Twitter: @bhardwajshash
