Crypto community optimism after the United Nations warns the Federal Reserve of recession and its consequences
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Answer Crypto community optimism after the United Nations warns the Federal Reserve of recession and its consequences
Amid fears of a financial recession, a section of analysts expect a major shift in the cryptocurrency market.
Currently, the cryptocurrency market is largely related to the stock market, but the possibility of an economic downturn could mean an advantage for cryptocurrencies.
In this context, a United Nations body warned, on Monday, several central banks, including the Federal Reserve, of the risks of a recession.
Meanwhile, cryptocurrency prices have remained largely stagnant in the past few weeks around the current price ranges.
What is the advantage of crypto if the recession worsens?
Central banks are risking the chances of a recession followed by a long-term recession if they keep raising interest rates.
Read:Bitcoin stabilizes at $ 10,400 and the digital currency BNB rises to its highest level in 7 months
According to report The Wall Street Journal, a United Nations agency said that the Fed risks inflicting significant damage on developing countries if the rapid rise in interest rates continues.
The United Nations Conference on Trade and Development (UNCTAD) stated that a percentage point increase in the Fed’s interest rate significantly reduces economic output in other rich countries.
Conference Secretary-General Rebecca Greenspan said there was still room to avoid a recession, adding:
There is still time to pull back from the brink of stagnation.
We have the tools to calm inflation and support all vulnerable groups.
But the current course of action harms the most vulnerable, particularly in developing countries, and risks tipping the world into a global recession.
The optimism of the crypto community:
In this context, there is a divided opinion about how cryptocurrencies will perform in a recessionary environment.
While the majority of the crypto community believes that cryptocurrencies will sink if the stock market falls, there is a growing argument for a different viewpoint.
Read:Reddit user reveals fake projects that raised $60 million
Stan Druckenmiller, an American investor confident of a recession in 2023, feels he would prefer the cryptocurrency market.
And he said:
Cryptocurrencies could benefit if mistrust in central banks was amplified.
Read:A tech journalist tells his story of losing £25,000 in crypto
Similarly, experts feel that Bitcoin is likely to skew and find its own way, thanks to its decentralized nature.
While there have been several headwinds in the macroeconomic scene recently, the price of Bitcoin has remained largely at the same level in the past 30 days.
The majority of days over the past month have seen Bitcoin trading below the $19,700 level.
At the time of this writing, Bitcoin is trading at $19,600, up 1.8% in the last 24 hours, according to CoinMarketCap.
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