ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Crypto Channel
  2. Analyst Sees More Favorable Conditions for Cryptocurrency Ahead
Crypto Channel
Share

Analyst Sees More Favorable Conditions for Cryptocurrency Ahead

Ben HernandezJan 11, 2023
2023-01-11

It was difficult to be a bullish cryptocurrency investor in 2022, but a new year is bringing out the staunchest supporters hoping for a turnaround. For instance, Tom Lee, managing partner and the head of research at Fundstrat Global Advisors, is seeing macroeconomic conditions improving for cryptocurrencies.

Inflation was an obvious force applying downward pressure on cryptocurrencies as the Fed was forced to tame higher consumer prices with rate hikes. With the expectation that the Fed will loosen its grip on monetary policy, cryptocurrencies could reverse the trend from last year’s downward trajectory.

Lee doesn’t see the Fed raising rate hikes to the detriment of economic growth in the new year as most of the capital markets suspect. That could be a major catalyst in helping to boost cryptocurrencies in 2023.

“Reminder, many inflation drivers have literally imploded and down/flat for 2022 after surging mid-year. One doesn’t have to look far to see progress," said Lee, as reported by the Daily Hodl. "While wages matter, the Fed doesn’t want to crush the economy and doesn’t necessarily want to crush jobs.”

Overall, Lee thinks the loosening of monetary policy will be a positive for the broader stock market, which digital assets like bitcoin have been following last year. If that same trend persists, then strength in the stock market should also spill over into cryptocurrencies despite their status as non-correlated assets — it certainly challenged that non-correlation last year, following stocks and bonds for most of 2022.

“Unless the inflation crisis persists, financial conditions will ease," Lee said further. “This means stocks rise, and stocks rarely post back-to-back annual declines In fact, three of the five best-ever annual gains came after a ‘negative’ year…”

“And it still puzzles me why the US is the worst-performing global stock market in 2022 outside of China-zone-ish countries,” Lee added. "Why is Europe outperforming when Europe is in the teeth of an energy crunch/inflation spiral?”

Other Factors That Can Boost Crypto

While all eyes will continue to be on the Fed this year, there are other factors that can help contribute to further bullishness in crypto. Further adoption can also contribute, especially if uses cases aside from speculation can be made for crypto.

The crypto market needs to reaffirm its methodology as a means to facilitate financial transactions as opposed to merely being a speculative asset. Blockchain technology is already disrupting the traditional financial arena, and more adoption by larger companies can help crypto’s cause.

Speaking along the lines of adoption, more countries taking on cryptocurrencies like bitcoin can help boost bullishness. Aside from El Salvador, adoption by an even bigger country could create an impact felt globally, potentially forcing other countries to consider crypto as a fiat currency alternative.

One thing that could also help crypto’s case is the need for regulation, especially after last year’s debacle with the collapse of cryptocurrency exchange FTX. More regulatory measures to shore up the crypto market could give hesitant investors more confidence in adding crypto to their portfolios, boosting demand even further.

For more news, information, and analysis, visit the Crypto Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X