In 2023, there were unexpected developments in the financial markets that could significantly impact the crypto market in 2024. BlackRock has identified three key macro trends to watch out for. The first trend is the surprising strength of the US economy, which defied expectations and exhibited strong growth throughout 2023. This could increase investor confidence, including in digital assets like cryptocurrencies. However, it also raises questions about the Federal Reserve’s future monetary policies and their indirect impact on the crypto market.
The second trend is the liquidity landscape following the Federal Reserve’s actions. Contrary to expectations of a liquidity crunch, rates reached 5.25% and there was an unexpected expansion of liquidity. This unique situation in the US could influence investor behavior towards riskier assets, such as cryptocurrencies.
The third trend is China’s economic performance and its global impact. The anticipated demand surge after China’s exit from COVID lockdowns did not materialize, which has implications for the global economic environment and could influence the crypto market.
As 2024 begins, BlackRock expects greater macro dispersion and elevated market volatility to persist. They highlight three key considerations for investors in the crypto market: the persistence of inflation, the future of the US dollar, and Europe’s market potential.
As investors navigate these uncertain waters, it will be critical to monitor how macroeconomic factors intersect with the crypto market.
[Disclaimer: This article provides accurate information but readers should verify facts independently and consult with a professional before making any decisions based on this content.]
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