According to Grayscale, a soft landing’ for the US economy is necessary for crypto to make a comeback

Grayscale said in a research that if the U.S. economy has a “soft landing,” the cryptocurrency market recovery might persist.

The largest current threat to crypto pricing comes from macroeconomic issues. According to research published by digital asset management Grayscale on Tuesday, macro issues may now pose the greatest threat to cryptocurrency values, and a sustained recovery would rely on the success of the United States economy in achieving the so-called “soft landing” that would prevent a recession.

According to the analysis written by Grayscale’s head of research Zach Pandl, “if the economy stumbles or the Federal Reserve raises real rates further, the crypto recovery may pause over the near-term.”

Some opponents say that the Fed’s Goldilocks recovery, which entails achieving the 2% inflation target without a dramatic rise in unemployment, is unrealistic.

Bitcoin’s price remained mostly unchanged in July, but Pandl predicted that large token prices would soon catch up to the increase in other risky assets provided economic data kept supporting the soft landing theory.

More price volatility in alternative cryptocurrencies “until resolved” is what he wrote. Since Bitcoin is a non-sovereign money system and an alternative to gold as a hedge against inflation, its value “could also rise” if the Federal Reserve chooses to allow a sustained period of above-target inflation.

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