2022 was a tough year for cryptoassets, and as the world welcomes 2023, the macroeconomic backdrop remains uncertain. Macroeconomic events will continue to shape the cryptoeconomy and the economy as a whole. This editorial takes a look at the top three macroeconomic events to watch in 2023.
A look at the top three macroeconomic events that could shape the economy and the crypto-currency market in 2023.
The new year has begun, and the next 12 months certainly look bleak in terms of the global economy. In 2022, assets such as precious metals, stocks and crypto-currencies have been impacted by macroeconomic events, leading to volatility in asset prices. Macroeconomics, is a branch of economics that studies the behavior of an economy as a whole, and it considers any event that has a significant impact on the overall economy of a country or region to be a macroeconomic event. Here’s a look at three different events that could have a significant impact on the global economy and affect the prices of stocks, precious metals, and crypto assets.
The Ukraine-Russia War
The Ukraine-Russia war is a macroeconomic event that can affect the global economy and the world’s assets in 2023. After Russian President Vladimir Putin spoke on his New Year’s address to the nation, people believe that the war will continue at his discretion. Instead of his traditional appearance in front of the Kremlin, Putin was flanked by a handful of Russian military personnel wearing army fatigues. The speech indicates that Putin will continue the war in Europe, despite criticism from the West. actions of the West to stop Russia by imposing financial sanctions on the country. As in 2022, the ongoing war in Europe will affect the world’s assets in 2023, as the war and sanctions have exploded energy prices and broken supply chains.
Covid-19 in China
Stocks, crypto assets and precious metals have been dealing with the macro effects of Covid-19 for over three years now. According to multiple reportsCovid-19 is said to be raging in China and the government has… stopped publishing The number of Covid cases. Covid’s presence in China worried global investors in 2022 and it lapsed in 2023. The reason for such concern would be global trade, as the pandemic has caused some supply chains to come to a screeching halt in recent years. Covid has affected crypto-currency prices, as “Black Thursday” in March 2020 shows bitcoin (BTC) falling below $4,000 after the United Nations World Health Organization (WHO) declared Covid-19 a global pandemic.
Central banks and the Fed to raise rates
After removing the benchmark bank rates before the Covid-19 pandemic and during the big stimulus injection of 2020, central banks like the US Federal Reserve have raised the benchmark interest rates a lot. Every time the Fed has raised the rate, it causes massive swings in the precious metals, equity and crypto-currency markets. Interest rate hikes are macroeconomic events that have managed to shake up lending rates around the world a lot. For example, a 30-year fixed interest rate for a mortgage in the United States today is 7.9%. This rate is much higher than the 3.815% 30-year fixed interest rate for a U.S. mortgage in January 2022. Raising or lowering the federal funds rate is one of the elements of monetary policy. macroeconomic event that always seems to cause market fluctuations.
Macroeconomic events can be positive or negative for a stock, precious metal or crypto asset if they are expected to impact the underlying fundamentals of the security. The aforementioned events may or may not affect global markets and assets around the world, but they could also shake them up. 2023 may be no different in this sense, as 2022 clearly shows that macro events such as the war in Europe, Covid-19 and central bank rate hikes have moved all of the world’s most popular markets, including fiat currencies, commodities, stocks and crypto assets.