Now before I get into this article of course it's all speculation and guess work based on various factors. However anything can always happen and no one can predict what's going to happen. That being said this article is for entertainment purposes only and is not financial advice.

Let's go over a few data points and factors that will help us make an educated guess as to what might happen with crypto and the overall market rolling into 2024.

Injection Of Money

Yes, the government hands out money all the time in food stamps and countless other programs designed to help those in need. It does a pretty decent job of it as much as people want to complain about it.

There's another big factor in play here and that's the general amount of money that was injected back in. Trillions of dollars was poured into the economy during the lock downs and to be fair job rates seems to be quickly back up to levels we had before lock downs. Thus a huge influx of money that mainly was invested in one way or another. But that's another big unknown factor as it's the only time just an injection of money into the overall general public was done.

Interest Rates

The big factor to take note of here is how fast interest rates have raised compared to before. The speculation here is because a faster more aggressive stance was taken then it will minimize or remove the chance of recession or a double up on inflation like we have seen in the past.

Normally the cycle goes high inflation, interest rates raise, they then back off as inflation starts to be remove only to show up again a few months later worse and then the fed acts on it again by increasing rates and setting us into a recession which often takes 10 years to fully recover from.

Other Factors

The Yield Curve

The yield curve is often looked at to predict a recession and it has a good track record at doing just that. This metric has been flashing recession for a while and only keeps getting deeper.

Real Estate Corporate

Corporate real estate is a bit different in the fact that CEOs often buy a office space for a set amount of time a few years. They then have to refinance that once it becomes due and this time around instead of refinance for that wonder 2%-3% most of them will be paying double the interest rate if not worse making corporate CEOs a bit worried about their bottom line another flash in the pan for a possible recession coming.

Fed Rates and Recession

There's always a large lag effect in terms of when interest rates go up and how it effects the economy. I've talked about this many of times before that this lag effect is about a year on average but can be as short as 8 months and as long as two years.

The rate hikes are currently double that of what they where before the pandemic and lockdowns hit the USA. So one could say we are squeezing it hard right now to prevent such a recession from happening and that might very well be the case. Times are hard for many but not as hard as if the economy slumped into a recession. That lag effect will start hitting some time mid next year along with the fed stopping rate hikes so far.

We have also seen that inflation on everything has remained high but the question now is will we see it stagnate and slowly come down or will be see it spike again triggering a hard recession?

Even More Factors

War - yes war as bad as it is are one of the biggest parts that drives a country out of recession. Take WW2 for example. It stimulates economies, drives trade and demand higher driving profits.

Crypto

There's more money then ever before and crypto seems to be a rater sought after asset of many. Legit trillions of dollars are sitting by the sideline right now ready to be injected into the crypto markets.

Mainly what we are seeing right now is a push OUT of altcoins into bitcoin and Ethereum based on the hype that a possible Bitcoin and Ethereum spot ETF could be approved. It's not until after those markets start to stagnate that we see a push back into altcoins and you get that alt coin season many talk about.

The unknowns are this is the first time Crypto will be part of a real recession so it's a big unknown how it will perform. Will it consolidate into Bitcoin and Ethereum pushing them to all new highs as people go into "safety" or a safe investment store of value. Or will it follow the rest of the general markets and fall?

What are you thoughts on what 2024 will bring to the crytpo world?

Posted Using InLeo Alpha