As Bitcoin’s price falls below $30,000, economists predict a 65% risk of recession


According to John Hopkins University professor Steve Hanke, a rising inflation rate is a clear sign of an impending recession in the United States.

The likelihood of a recession, according to Hanke in an interview with Kitco News, is around 65 percent; however, he did not provide a precise timetable, stressing that everything is dependent on the Federal Reserve. The Fed was under increasing pressure to act after inflation touched an all-time high of 8.6 percent.

The Fed was held responsible for its errors

To put it another way, according to the economist, there is no way to know how the Fed’s prior policies, particularly those involving the creation of money, might affect inflation.

“I’m at ease with a high percentage of 65 percent” That same Fed that got us into this situation in the first place couldn’t even foresee or forecast it, they had no idea what they were doing…>

This horrible inflation has been caused by their faults, which resulted in producing a lot of surplus money,” Hanke remarked.

A return to 2% inflation may not be achievable since there is already too much money in the economy, and a recession and inflation may be possible at the same time, according to Hanke.

He predicted that the present inflation rate will continue for a few more years since the money supply is guaranteed to keep growing.

After all, “even if you overdo a tightening, and have a recession, you’re still going to have that inflation to cope with,” he concluded.

Equities and crypto markets plunged in the aftermath of increasing inflation, eliminating any hope of a near-term recovery.

For Bitcoin, which is seen as an inflation hedge, the losses stretched below the $30,000 mark in this scenario. It had fallen by almost 2% in the previous 24 hours at the time of publication, trading at $28,700.

Market opinion was that if the CPI were lower than predicted, the price of Bitcoin would likely rise beyond $30,000 before the data was released.

The market may also experience another negative emotion if the Fed views strong inflation as a reason to hike interest rates.

According to Microstrategy CEO Michael Saylor, Bitcoin and inflation have yet to reach their height, but he advises investors to hang on to their cryptos in the face of the current market turmoil.

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