Last week, a lot of economic data was released again, and unfortunately, not everything was as positive as you might think. Coinbase investigated the situation further and warned of the uncertainty in the crypto world.
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Coinbase warns of recession and collapse
In the latest issue of the weekly magazine Research report Coinbase writes that the German state of Saxony is about to finish selling Bitcoin (BTC). The stock is reaching its end.
Therefore, the impact of these sales will be limited. The cryptocurrency exchange also expects that any BTC sales originating from Mt. Gox will continue in an orderly manner for the foreseeable future. Therefore, the impact on the market will likely remain limited.
Has the US economy peaked, is this bad for cryptocurrencies?
However, the American company is expecting harsh weather. Coinbase reflects the fears of more and more analysts that the US economy could soon enter a recession.
Meanwhile, the market is still expecting the Federal Reserve, the US central bank, to cut interest rates. This could begin on September 18. Interest rates are currently high due to high inflation, but in the past week it has become clear that inflation is slowly cooling.
the Consumer Price Index The consumer price index fell 0.1% last month compared to May, better than the expected 0.1% increase in inflation.
This means the Fed has more room to cut interest rates, which would theoretically be good for both the economy and financial markets. In the past, recessions have often worked out well for cryptocurrencies, in part because Bitcoin, for example, was designed to weather economic downturns. However, Coinbase doesn’t necessarily see lower inflation as a positive.
Because if the fear of a serious recession increases, this is a potential reason for crypto investors to sell instead of investing more during interest rate cuts.
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Ethereum and Solana are trading relatively strongly.
For now, Coinbase is saving crypto enthusiasts from the volatility of the next few months. Analysts warn that we can only count on an improvement by the end of September.
Moreover, the cryptocurrency exchange notes that Ethereum (ETH) trading volume is relatively high, which is likely due to the fact that investors are waiting for the arrival of spot US ETFs for the largest altcoin.
Solana (SOL) has also remained relatively strong this month, despite the heavy crash of several other tokens. According to Coinbase, this suggests that Solana could outperform many other coins.
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