The high risk of global recession could affect the cryptoma markets

The high risk of global recession could affect the cryptoma markets

The crypto markets flew this year, but a continued view of the global economy could stop these wings.

According to a WEF report of January 16, the International Monetary Fund (IMF) expects around a third of the global economy to be recovered in 2023.

"The global growth prospects remain anemic and the global risk of recession is high."

The report added that companies were facing a “triple challenge” at the beginning of 2023. High prices for important inputs, a tighter monetary policy and weaker demand will dampen any economic relaxation.

chief economists also see a lack of personnel, talent availability and considerable cost reductions as factors. All of this has a trickle-down effect for the retail consumer at the end of the stack.

Why cryptoma markets could be affected

In addition, the US savings rate has fallen to the lowest level of around 2.3 %. This metric is used to measure the amount of money that a person deducts from their available income to put them aside for investments.

don't look now, but the savings rate is at a 17-year low.

excess liquidity is becoming increasingly rare (and increasingly valuable) pic.twitter.com/lcwv73hupd

- Jack Duffley (@jackduffley) 16. January 2023

This could have a significant impact on crypto-assets that are generally considered risky. If less available income is available, there will be fewer investors in risky assets such as crypto.

A recession will probably have further impact, since higher prices press more wallets and only the rich can afford to try risky crypto investments.

only if inflation is under control and the cost of living decreases, the overall economy will recover. Only then will there be enough floating capital from the retail sector to risk crypto-assets.

Nevertheless, the WEF confirmed in a report in the early this month that crypto will stay here.

outlook on the cryptom market

The markets have recovered this year, but analysts warn of a bull trap. Today there was a slight decline, with the total capitalization dropped to $ 1.03 trillion. However, the markets have increased by 24 % since the beginning of the year.

There is usually a Chinese New Year Rally, so it can fizzle out well after the festive days. The majors like BTC and ETH have fallen by a few percent today, and the other old coins are also on the retreat.

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