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main threat to the price of Bitcoin?

main threat to the price of Bitcoin?

If Bitcoin has just returned the $ 20,000 mark, warning some players such as the Japanese financier Nomura about new risks like recession. A recession that could affect countries like the United States or the United Kingdom and Europe as a whole. What really is?

What is the recession?

Before we get to the heart of the matter, let ‘s start by clearly defining the terms. To qualify the recession, INSEE (National Institute of Statistics and Economic Studies) provides the following definition:

A period of temporary decline in a country ‘s economic activity. We often talk about a recession if we notice a decline in Gross Domestic Product (GDP) over at least two consecutive quarters.

The firm of Nomura also warned of a possible recession within the eurozone. But not only because the Japanese holding also carries the same kind of risks the Asia-Pacific zone. A feature that may influence the prices of risky assets such as stocks or digital assets. Moreover, yesterday, the CAC 40 closed the session losing almost 3%. Losses primarily attributable to the risk of a recession in the euro area.

For example, in France, in the first quarter of 2022, GDP fell 0.2%. Second quarter figures should be available within a few days. If GDP were to fall again, we would be within the precise framework of the definition of recession as presented by INSEE.

Crypto market situation!

At the time of writing these lines, and believing data from the Coinmarketcap platform, the crypto market is weighing $ 909 billion. The figure has increased by 1.12% over the last 24 hours.

The price of Bitcoin outperformed this rise since the mother of cryptocurrencies gained more than 1.70% over the same time period. On the major altcoins side, the price of Ethereum rose 0.94% and the post of BNB increased by 3.48%.

In the top 10, Solana performed the most beautiful operation of the day, since her SOL signal was valued at 4.77% in 24 hours! A little further, the AVAX signal of the Avalanche project knows 7.25% increase. An increase that allows the project to once again exceed the $ 5 billion market cap threshold.

Since the beginning of the year, the Fed’s monetary policy has weighed in particular on the crypto market. So, from January 1, Bitcoin has already surrendered more than 55% of its capitalization. Over the same period, the S&P 500, the benchmark index in the United States, posted a decrease of almost 20%.

Why isn’t the bear market over?

Some are waiting for the end of the Messiah-like bear market. But obviously perhaps the general decline is not over. In the equity market, traders are always particularly concerned about the slow pace of growth. Delays that could jeopardize the chances of a more sustainable recovery.

In a note published earlier this week, Japanese financial giant Nomura suggested that major global economies could return to recession “within another 12 months”. A situation that could be greatly facilitated by the tightening of monetary policies proposed by the central banks, in response to massive inflation. Inflation which, let us remember, is just over 8% in the United States. According to Nomura, the real danger is thus present:

There are growing signs that the global economy is entering a synchronized slowdown in growth, which means that countries can no longer rely on a reversal in exports for growth, we are also encouraged to predict multiple recessions.

In detail, Nomura analysts believe that Europe, the United Kingdom, Japan, Australia and South Korea are likely to fall into recession. Similar observation for the United States, although the analysis indicates that Uncle Sam’s country may have a “long but shallow” recession. Nomura is still dependent 5 quarters of the recession.

The Russian-Ukrainian conflict affects the European economy!

Also according to Nomura’s analysis, the recession could hit Europe hardest. And this, because of a key element: the armed conflict between Russia and Ukraine.

In the United States, Fed Chairman Jerome Powell last week reaffirmed the U.S. central bank’s commitment to the fight against inflation. So Powell says he’s more worried about the challenge inflation is the possibility of the recession emerging, due to rate hike. One thing is for sure, central banks around the world will try to handle the fight against inflation without pushing their economies into recession.

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