Top 3 Macroeconomic Events That Could Shape Crypto Market in 2023
2022 was a rough year for the entire crypto market, with many digital assets losing their value significantly. The macroeconomic environment affected the market hugely and will continue shaping the crypto space in 2023.
The New year has begun; however, we may see little growth in the global economy in the upcoming months due to macroeconomic events that impact digital assets and stocks. In economics, a macroeconomic event is defined as any incident that massively affects the entire economy of a region or country.
The Russia-Ukraine War
This article examines three major events that could affect crypto and stock prices in 2023. One of the events is the prolonged Russia-Ukraine war. People are convinced that Russian President Vladimir Putin will not stop the war any time soon following his New Year’s Eve speech.
Putin’s speech hinted that Russia would keep attacking Ukraine despite the European countries’ actions to stop Russia by subjecting the country to several financial sanctions. Like in 2022, the war could affect the world’s economy this year as the sanctions have increased energy prices.
Covid-19 in China
Crypto assets and stocks have had to deal with the macroeconomic effects of Corona pandemic for nearly three years. Furthermore, multiple reports suggest that Covid-19 is spreading fast in China again, and the news worries global investors.
Investors believe that a new corona wave will again limit global trade as the pandemic has caused some supply chains to break since 2020. Also, the pandemic impacted crypto prices in March 2020 when World Health Organization declared Corona a global outbreak.
Fed Rate Hikes
The United States Federal Reserve has significantly raised the benchmark interest rates. Every time the Fed raises the rate, it leads to massive fluctuations in the crypto market. These interest rate hikes have also largely affected the world’s lending rates.
A macroeconomic event can be negative or positive for crypto assets if it is expected to impact the assets’ key foundations. Also, the events discussed above may or may not impact digital assets this year, but 2022 proved that macroeconomic events shape the crypto market.
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