The crypto market rebound this year will materialize if the U.S. economy can achieve a soft landing. This was stated by Zack Pandl, Grayscale Investments’ director of research, according to Bloomberg.
The analyst noted that a low-inflation, steady-growth scenario could help risk assets, including Bitcoin, by allowing the the Fed to lower real interest rates.
“If the central bank decides to tighten policy further or its earlier steps push the economy toward a recession, the crypto rebound in the near term could pause,” Pandl warned.
The agency noted that many investors now believe the Fed is near its peak policy rate amid easing price pressures.
This prospect, combined with optimism regarding Bitcoin-ETF applications, has sparked a revival in the crypto market, but the rally has since stalled.
Persistent regulatory uncertainty and DeFi-sector stresses also affected sentiment, journalists said.
Earlier, Galaxy Digital CEO Mike Novogratzlinked Bitcoin’s rise to the Fed and BlackRock’s ETF decision.