- The present inflation situation is a key aspect of his forecast.
- The Federal Reserve has been increasing interest rates.
There has been a severe drop in the cryptocurrency market yet again. Extremely negative patterns may be seen in the Bitcoin price. Its price dropped by about 6% in the previous 24 hours, to $18,753. Expert investor Michael Burry has warned that the recent crypto market decline could trigger a global economic disaster on par with that of 2008.
Burry was one of the few experts to foresee the housing and subprime mortgage crisis that hit the United States in 2008. Burry’s forecast of an economic disaster relies on a number of different assumptions. Bitcoin has lost about 8% of its value in the previous week. While the Ethereum merging has gotten off to a good start, ETH prices have been highly pessimistic. In only 24 hours, ETH has lost over 9% of its value.
Multiple Factors Incorporated
Dogecoin, Solana, Polkadot, MATIC, and Ethereum Classic are just some of the other cryptocurrencies which have dropped by 8-10%. The crypto market decline is only one of several elements supporting Burry’s forecast. The SPACs market fall is another thing he brings up. The market for Special Purpose Acquisition Companies reached its apex in 2021, but it has been in steep decline ever since.
The present inflation situation is a key aspect of his forecast. Inflation is at historically high levels, as measured by the Consumer Price Index. To slow inflation, the Federal Reserve has been increasing interest rates and implementing quantitative tightening.
In a recent address in Jackson Hole, Fed Chair Jerome Powell warned families and companies to brace for “pain” as the central bank battles inflation. Right now, the US economy is through a hard patch. A recession is a real possibility, and people are already coping with historic inflation.
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