An executive of the US crypto exchange Coinbase issues a warning, saying that macroeconomic factors are creating headwinds for the markets in the near term.
In a new interview with Scott Melker, David Duong, Coinbase’s head of institutional research, says the rising strength of the US dollar and the relatively aggressive stance of central banks around the world could negatively impact crypto markets in the near future.
“Perhaps I want to be very defensive especially in this very short term [because] the dollar has bounced back now, it’s been about a week and a half…
And some of that is definitely seasonal, but that’s a big deal for crypto. We’re sitting as the numerator of the USD so I think that plus rate differentials will play a huge part probably this week as we’ll hear from the Federal Reserve (FED) who will or won’t say this is the final [interest rate hike].
The European Central Bank (ECB) says they want to raise, but the Purchasing Manager’s Index (PMI) numbers that just came out, weak economic data, [so] I don’t know if they can…
Japan is very unwilling to take an aggressive stance and move away from yield curve control so if that’s the interest rate differentials that we’re working with the dollar may actually stay stronger longer in this trend which I don’t feel you comfortable with crypto right now.”
However, according to Duong, the further we get into the second half of 2023, the better the trading environment should get for digital assets as the Mt. Gox settlements are ending and investors are starting to look forward to the upcoming Bitcoin (BTC) halving next year.
“I think we will probably get a better climate as we get further into the second half of the year. I think by then the Mt. Gox distributions, which payments will be made, [and] people will start talking about the halving seriously.”
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