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IMF Issues Warning that Bitcoin Could Fall If Recession Hits

IMF Issues Warning that Bitcoin Could Fall If Recession Hits

Bitcoin and other crypto assets continue to fall. Showing that the cryptocurrency market is exhibiting signs of deterioration. The global economy is tightening due to rate increases from international central banks. Both the stock market and the crypto market have suffered greatly as a result.

The MIF warned about an impending economic downturn. A likely worsening of the global recession in 2023 is also mentioned. The financial markets will become extremely fearful and reduce their risk exposure.

Stock Prices and BTC Price Correlation

For more than a year, the price of Bitcoin has shown a strong correlation with stock assets. BTC patterns and some stocks are a clear indication. Many events and circumstances explain the correlation noted. S&P 500 is among the stocks that have a reliable connection to Bitcoin.

Throughout the pandemic recession of 2020, the bitcoin price fell. Equities followed a similar pattern. However, the system changed in line with how the economy progressed over time. The result was a sell-off in the cryptocurrency and stock markets in December 2021 and May 2022.

The trends predict how markets behave at a particular threshold. Implying that institutional funds have achieved an essential percentage of capital inflows.

Despite the weakening economy, the price of Bitcoin could fluctuate. However, bitcoin may experience a sharp decline once there is a worldwide recession. This will encourage investors to withdraw their money through significant sell-offs.

BTC May Present Long-Term Bullish Prospects

In the event of a favorable intervention, the price of Bitcoin will increase. The US Federal Reserve and central banks worldwide may heed the IMF’s recommendations. They start by lower interest rates to prevent a recession. A circumstance like this would lead to a price increase for Bitcoin and other digital assets. Equity stocks will also make progress.

Even without the central banks’ involvement, there may still be hope. A recession will develop and drag down the cryptocurrency sector, with a decline in the price of BTC. Some crypto investors find these decreased prices to be a starting opportunity.

Bitcoin and Stocks

Keep in mind that Bitcoin did not gain popularity during the 2008 recession. But after it crashed in March 2020, it experienced a significant bull market. The bull market boosted its dominance in the cryptocurrency industry. From then on, Bitcoin surged far above the stock market and has maintained that position.

The total outcome indicates that Bitcoin has a favorable outlook. As of this writing, the price of one bitcoin is around $19,137, showing a decline over the previous day.

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