The US economy is setting its course to a recession by December, said analyst Henrik Zeberg.
Zeberg predicted that as the economy crashes, the Fed will continue to cut rates and pump more money.
Zeberg also believes that the recession will have a “painful” impact on the crypto market.
Head macro analyst at SwissBlock, Henrik Zeberg, warns the crypto market is in for a rough ride as the United States faces the threat of a recession this year. Zeberg predicts that 99% of digital assets will collapse as the crypto space encounters its first recession.
In an interview with the Metals and Miners podcast, Zeberg said that the recession will start to take shape in December and the Federal Reserve will start cutting rates by an estimated 50 basis points, affecting the markets all over the world. He added:
“I think there will be a 50 basis points in September and I think they’re going to cut you know faster into the end of this year. What we see is simply that the slowdown of the economy.”
Zeberg was asked about the impact that the traditional markets will have on Bitcoin similar to what was witnessed earlier this month when the leading digital asset’s price collapsed by $6,000 due to the Yen carry trade and recession fears. According to the analyst, the recession would have a “painful” impact on the crypto market.
The analyst argued that a market where cryptocurrencies like Dogecoin (DOGE) are valued around $15 billion is bound to go bust and the bubble will soon burst. He said that the small market cap tokens will see the biggest crashes while the cryptocurrencies with extreme valuations will face price plunges as well.
“I think that is going to be very painful and the same goes for a lot of small caps that will has you know extreme valuation that’s also going to be to hurt and and the same goes for large caps as well.”
Zeberg said that the US economic bubble is so big that the recession would have the worst impacts witnessed since 1929. He predicted that the Fed will continue to pump money into the US financial system and keep cutting the interest rates, affecting the financial markets around the globe.
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