Zinger Key Points
- Alex Kruger breaks down the crypto market correction, citing tech stock vulnerabilities and a potential Federal Reserve policy shift.
- Despite a rocky ETH ETF launch and significant Grayscale sell-offs, the macroeconomic landscape remains constructive for crypto.
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Renowned economist and trader Alex Krüger analyzed the factors influencing the recent crypto market correction, particularly the importance of the “Trump trade.”
What Happened: Krüger pointed out a series of factors including the vulnerability of tech stocks, a shift from tech stocks to small caps and the Bank of Japan’s impending hike and tapering of quantitative easing.
He also discussed the impact of the assassination attempt on former President Donald Trump and the partial unwinding of the “trump trade.” The economist also sees the appointment of Kamala Harris as the Presidential Nominee as one of the factors contributing to that.
Krüger highlighted the role of equity-crypto correlation algorithms, the technical correction across crypto assets and the narrative around Bitcoin becoming a strategic reserve asset. He also mentioned the Bitcoin BTC/USD conference and the larger-than-expected Ethereum ETH/USD selling flows from Grayscale as factors.
Why It Matters: Krüger’s analysis provides a comprehensive understanding of the dynamics affecting the crypto market. Despite the disappointing launch of the Ethereum ETFs, nothing major has changed, he adds. His prediction sees the market trading the elections theme for the rest of the year, with Republicans likely to win, which he sees as bullish.
He added that the current market has priced in around a 60% probability of Trump winning. While he states the probability could fluctuate, he foresees short euphoria/depression cycles until November with an upward trend.
Krüger also expects the Federal Reserve to start its cutting cycle in September and believes there will be no hard landing, keeping things constructive on the macro side. Kruger’s insights offer valuable context for investors navigating the volatile crypto market.
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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