Global Financial Landscape: Unpredictability and Uncertainty in the Wake of Monetary Policy Shifts
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2 min read
Title: Op-Ed: Can the US Dollar and Crypto Complex Rally in 2025?
As we approach the end of 2024, it’s essential to take a step back and assess the current landscape. The market is inherently unpredictable, but I’d like to focus on a pressing concern that could significantly impact the global economy: the potential for a global liquidity crunch.
The DMT suggests that such an event might occur, which would have devastating consequences for the entire financial system. The article highlights the importance of global liquidity in maintaining the stability of markets and economies. It’s crucial to understand that the Federal Reserve’s hawkish stance could lead to tighter monetary conditions, ultimately reducing global liquidity and increasing risks.
Now, let’s turn our attention to the crypto space. The recent price pump has been largely driven by optimism surrounding McTrumper’s crypto policy, not a loosening of global liquidity. However, this rally may be short-lived as markets begin to digest the implications of tighter monetary conditions.
I firmly believe that in the event of a global liquidity crunch, we would see significant price declines across the board. This is because panic selling would take over, leading to an unmitigated disaster for many investors. In this scenario, BTC could potentially find support at $20,000 but ultimately be driven by panic and fear rather than fundamentals.
In light of these developments, I’m inclined to believe that we won’t see a rally in the US dollar or crypto complex until there is a major shift in central bank policy – essentially, a free money party reminiscent of the 2009 stimulus package. Only then can we expect to see a significant surge in global liquidity and subsequent price movements.
It’s essential to recognize the risks that lie ahead. A coordinated effort to devalue the USD could lead to an unprecedented rally in crypto markets, potentially pushing BTC prices to $1 million or higher. However, this is contingent upon a drastic change in monetary policy.
In conclusion, I urge investors to prepare for volatile markets and potential dislocations as we head into 2025. The FED’s hawkish stance increases the risk of a global liquidity crunch, which would be catastrophic for crypto prices.
Source: blockonomi.com
