Everyone is worried about the world’s current economic crisis, and US’s recessionary fear only makes it worse. After Fed Chairman Jerome Powell’s last speech on recession and further interest rate hikes, the crypto and stock market took a hit. At the same time, the fear and greed index has also shifted to “extreme fear.” And now, market experts predict a further 50% drop in the stock market. The chief strategist at bubbatrading.com says it will destroy the American middle class.
The recent price action in the stock market
Jerome’s statement on the American economy took a toll on stock and crypto prices. Bitcoin has now slid below $20k, and the total crypto market cap has fallen below $1T. The stock markets in the US also saw their lowest performance in a long time. NASDAQ also dropped by 3.94% on Friday, which is one of the worst losses since mid-June. Other indexes and the price of precious metals also took a hit. This includes Gold, Silver, and Platinum, which were down by 1.13%, 1.79%, and 2.38%, respectively.
All this shows that Bitcoin still correlates with the S&P 500, which was also down by 3.37% on Friday. Bitcoin’s correlation with the index is at 0.59, which is almost near the all-time high. So, a further drop expected in the stock market is also going to be negative for crypto.
Another 50% drop in the stock market
The recession is not going to stop if the feds keep raising interest rates, and that is going to make this worse. The chief strategist at bubbatrading.com says that the stock market could lose more than 50% of its value from here. Todd ‘Bubba’ Horwitz also has a conspiracy theory about raising interest rates during a recessionary period. He said, “There is a political agenda behind all of this stuff that’s going on, which is to try to create the Great Reset.” And this will impact the middle class the most.
Todd expects food shortages, insane oil prices hike, and food riots in the US. There is also the huge possibility of hyperinflation, which might happen really soon.
What are your thoughts as experts predict a further 50% drop in the stock market? And do you think this will be an opportunity to bank on? Let us know in the comments below. And, if you found our content informative, share it with your friends.
Also Read: Binance freezes corporate crypto account with $1 million in holdings.