Last week, eToro’s senior market analyst Mati Greenspan shared his thoughts on the future of Bitcoin during a free webinar.
During the talk, he discussed what factors could influence the short-term price of Bitcoin, when the upcoming halving should be priced in, the Bakkt effect, and how the long-term price of Bitcoin may be affected by recessions.
A likely economic downturn
Greenspan started by mentioning two of the most pressing issues within the global economy, stating: “Bond yields have started to invert and there’s low interest rates everywhere.”
According to the analyst, the European Central Bank (ECB) has been printing a few billion euros every month to cover weak spots in the EU’s economy.
Meanwhile, the US has been doing the opposite, with the Federal Reserve looking to reduce the balance sheet rather than print more money. In the past few months, the Fed has started to reduce interest rates again to help drive the economy in an upwards direction.
Greenspan believes the Fed’s strategy has been working, stating: “Since the financial crisis, stocks have been growing steadily.” Essentially, the senior market analyst believes money has been piled up and sent directly to the stock market.
If things were to fail, there’s room for major drops in the stock market, with potential falls of at least half of the total current market value.
Until money stops being printed and pumped into the economy, the market may continue to grow.
What’s the most likely long-term scenario with constant money printing? Greenspan believes a “currency war” could be on the cards, where every country will attempt devalue their currency so that they benefit the most from trade.
Japan has already devalued the yen against the US dollar, much like China’s RMB, and other countries will most likely follow.
According to Greenspan: “Brexit is a smoke and mirrors situation as the British