Forecasting Challenges for the Crypto Market in Q2/2024: Impact of China and the US
CHINA
- Economic Landscape: China faces significant economic challenges in Q2/2024. Despite a reduction in interest rates from 3.35% to 3.15%, the country anticipates a decrease in GDP for the quarter, accompanied by rising inflation and unemployment rates. The M2 money supply and bank budgets in China are also expected to decrease in Q2/2024, leading to a reduction in liquidity. This directly impacts the crypto market, especially since 70% of the current trading volume worldwide originates from the Asian region.Previous Market Fluctuations: Previous liquidity fluctuations in China from May to September 2023 demonstrated that the crypto market could decrease by half or even by a third. Conversely, when liquidity is pumped strongly from late 2023 to February 2024, the crypto market can experience significant increases, even up to 5 or 10 times.Current Policies: Presently, the Chinese government has been withdrawing liquidity since February 2024, which could lead to further volatility and uncertainty for the crypto market in the near future.
US
- Economic Landscape: Amid decreasing inflation, the US is expected to record lower GDP growth in Q2/2024. Interest rate adjustments are also possible, with a high likelihood in August or September of the same year.Previous Market Fluctuations: Although the M2 money supply remains stable, the accounting-balanced budget is decreasing compared to Q1/2024. The specific impact of this on the crypto market depends on various other factors.
In conclusion, despite the challenging forecasts in Q2/2024, the crypto market continues to face various uncertain factors from major economies like China and the US. Fluctuations in liquidity and other economic indicators could present opportunities or risks for investors and crypto project developers.