Today in Markets

The Return of Good Times™?

It's looking like crypto front-ran public markets this time
Dec 15, 20231 min read

Roaring Twenties rerun? Crypto assets are down slightly on the week, taking a well-deserved break from the pump after 8 consecutive weeks of green candles, but interest rate optimism has market participants heralding the return of the bull market! How much further can we run?

America’s Federal Reserve chose Wednesday to leave interest rates unchanged for their third meeting, citing the economy “has slowed” since Q3 2023 and noting for the first time that inflation “is easing.”

The Fed sees itself cutting interest rates 3 times next year and markets are taking the over on this bet, projecting that there will be 5 cuts in 2024 and anticipating that they could begin as soon as March, with a 31% chance there are even two cuts just 3 months into the year.

Traders are in search of narrative and the bull case is not being shy about presenting itself! With no obvious signs of an impending recession in sight and the labor market expected to remain resilient, easing rates could provide the fuel crypto assets need to rocket to new all-time highs.

If we have truly arrived at Soft Landing Island, risk assets (like crypto and stocks) will only have one way to move: up!

Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.

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