2022 has been a difficult year for cryptocurrencies, and as the world welcomes 2023, the macroeconomic backdrop remains uncertain. Macroeconomic events will continue to shape the crypto economy and the economy as a whole. This editorial looks at the top three macroeconomic events to watch out for in 2023.
Examining the Top 3 Macroeconomic Events That Could Shape the Economy and Cryptocurrency Market in 2023
The new year has begun and the coming 12 months look bleak for the global economy. In 2022, assets such as precious metals, stocks and cryptocurrencies were affected by macroeconomic events, leading to volatility in asset prices. Macroeconomics is a branch of economics that studies the behavior of the economy as a whole and considers any event that significantly affects the overall economy of a country or region as a macroeconomic event. Below is a look at three different events that could have a major impact on the global economy and affect the prices of stocks, precious metals and cryptocurrencies.
The Ukraine-Russia War is a macroeconomic event that could affect the global economy and world assets in 2023. After Russian President Vladimir Putin’s New Year’s Eve address to the nation, people believe the war will continue as he sees fit. Rather than his traditional appearance in front of the Kremlin, Putin was flanked by several Russian servicemen and women dressed in army fatigues. In the speech, Putin indicated that he would continue the war in Europe despite the West’s steps to stop Russia by imposing significant financial sanctions against the country. As in 2022, the ongoing war in Europe will weigh on world assets in 2023 as war and sanctions cause energy prices to skyrocket and supply chains to break.
Covid-19 in China
Stocks, crypto assets and precious metals have been dealing with the macroeconomic effects of Covid-19 for over three years now. Multiple reports have claimed that Covid-19 is rampant in China, and the government has stopped releasing numbers on the number of Covid cases. Covid in China worried global investors in 2022 and it carried over into 2023. Global trade may be the cause of such concern, as the pandemic has brought particular supply chains to a standstill over the past few years. Covid has affected cryptocurrency prices as March 2020’s “Black Thursday” saw bitcoin (BTC) fall below $4K after the United Nations World Health Organization (WHO) declared Covid-19 a global pandemic.
Central Bank and FED to increase the discount rate
Central banks such as the US Federal Reserve have raised their benchmark interest rates significantly after suppressing benchmark bank rates before the Covid-19 pandemic and during the main stimulus injection of 2020. When the Fed raises interest rates, it causes huge swings in the precious metal, stock and cryptocurrency markets. Interest rate hikes are macroeconomic events that can significantly shake the world’s credit rates. For example, the 30-year fixed interest rate on a US mortgage today is 7.9%. The rate is significantly higher than the 30-year fixed mortgage rate in the United States in January 2022.
Macroeconomic events can be positive or negative for a stock, precious metal or cryptocurrency if it is expected to affect the underlying fundamentals of the security. The aforementioned events may or may not affect global markets and world assets, but they may also shake them to their core. 2023 may be no different in this regard, as 2022 clearly sees macroeconomic events such as war in Europe, Covid-19 and central bank interest rate hikes moving all of the world’s most popular markets, including fiat currencies, commodities, securities and cryptocurrencies. shows. .
What do you think about three macroeconomic events that could shape the crypto, stock and precious metal markets in 2023? Let us know what you think about this topic in the comments section below.
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