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Blockonomi
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Op-Ed: Crypto’s Crossroads: Market Liquidity, Geopolitics, and the Road to 2025
- Global market liquidity is the most important factor for crypto prices. Any significant drawdown in liquidity could cause prices to suffer.
- Rising geopolitical tensions and strange things happening in the banking sector. China is ignoring stimulus measures, while western central banks are lowering rates, signalling concern about the global economy.
- Trump's re-election could create risks for market liquidity with increasing social unrest or a possible assassination. Markets would react negatively and the US economy could take a hit.
- Ongoing conflict and nuclear saber-rattling in the Middle East threatens oil pipelines and lower oil output, which could be bad for market liquidity and crypto prices.
- BTC ETFs are now connected to the global macroeconomic environment and a lack of liquidity could lead to a crypto crunch.
- The ongoing macroeconomic environment looks confusing and there is much less predictability going forward, gold is making all-time highs while central banks are behind the curve.
- A major liquidity drawdown could happen, which would slam crypto prices lower. Panic selling could lead BTC to look for support at the $20,000 level.
- Major themes that could affect the crypto market are already in play, such as central bank policies, geopolitical risks, and the 2024 US Presidential election. The risk of a significant liquidity crunch is real.
- Hedge funds accordingly to what lies ahead.
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