Bitcoin had its best January since 2013, thanks to bets that monetary tightening and the crypto-sector crisis are both subsidings. It has increased 39% since the beginning of the year, a first-month gain that has only twice been surpassed in the early days of cryptocurrency.
However, the tides appear to be turning. February appears to be another harsh month for the cryptocurrency market. After giving up all of their weekend gains and trading flat on a weekly basis, Bitcoin and other significant crypto tokens were trading down on Monday.
Bitcoin lost roughly 2% of its value and fell under the $23,000 level in the early Asian hours. Most alternative currencies were trading at lower prices, but the losses were limited.
Let’s explore.
Mike McGlone indicates recession can bring an economic reset
Mike McGlone, the Senior Macro Strategist at Bloomberg Intelligence, recently addressed the current state of crypto in a tweet. He claimed that the cryptocurrency market might be entering a true recession, which is characterized by lower asset prices and greater volatility.
In addition, he noted that just as the financial crisis, the most recent severe US economic downturn, gave rise to Bitcoin, this recession too reset the economy and mark similar milestones.
Other analysts have also warned of a recession
Several analysts have issued recessionary predictions before McGlone. By the middle of next year, the U.S. and the rest of the world’s economies are most likely to enter a recession, according to Jamie Dimon, CEO of JPMorgan Chase.
Elon Musk, CEO of Tesla and owner of Twitter, has issued a recession alert. According to him, the recession would be increased alarmingly if the US Federal Reserve raised interest rates once more. As the economies of the US, EU, and China slump, IMF Managing Director Kristalina Georgieva predicted that 2023 will be “tougher” than last year.
To Conclude
Even if the news is constantly predicting a recession, there is no need to become alarmed. Investors can benefit from this phase of output fall by utilizing it. One may survive a recession by doing research, identifying crypto assets with the potential to outperform, employing derivatives, and keeping cash on hand.
Source: https://coinpedia.org/news/is-the-cryptocurrency-industry-experiencing-its-first-real-recession/