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OpEd: Crypto Crunch Hits – Why Markets Will Fall Further
- Bitcoin, as the flagship global risk asset, is currently being hit hard amid a global risk-off phase.
- The trend of bad news leading to good news for asset prices, prevalent post-2008, is now over.
- Central banks' actions to support asset prices are facing challenges due to higher inflation expectations.
- Jerome Powell's monetary policy is not expected to rescue asset prices anytime soon, contributing to a downward trend.
- Inverted yield curves are causing concerns in the financial markets, hinting at a treacherous economic situation.
- Government borrowing, especially with Germany and the US, is on the rise, impacting the financial landscape.
- Proposals like issuing 100-year non-tradeable zero-coupon bonds are being considered to manage existing debts.
- Global economic turmoil is anticipated in the next 18 months, posing challenges for the financial markets.
- Market volatility is expected to continue, affecting risk asset prices negatively in the foreseeable future.
- Crypto fundamentals remain strong, but macroeconomic factors are driving market uncertainties and potential declines.
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