xtlcd:Global Conflict Is Hurting Crypto Prices

Geopolitical tensions have had a negative effect on crypto prices in recent weeks. 

Cryptocurrencies could fall back down to lows as we saw in June, possibly even further, if geopolitical tensions continue to intensify around the world, experts say. While July was the best month since 2020 for stocks and crypto, rising tensions between China and the U.S., the two largest economies in the world, “won’t support risk appetite anytime soon,” according to Moya. 

“The macroeconomic environment continues to cause fear for investors, as the European energy crisis dominates headlines,” according to Marcus Sotiriou, a market analyst at digital asset broker GlobalBlock. “Germany’s sanctions against Russia have led to the shutdown of the NordStream pipeline, which has resulted in gas prices soaring.”

The crypto market has been closely correlated with the stock market since the start of the year, so when stocks fall because of the current conflicts in the world, cryptocurrencies most likely will too. On top of that, the U.S. economy is wrestling with four-decade high inflation, rising interest rates, and a potential recession. Hiesboeck says more uncertainty around the world’s politics and the U.S. economy means more unpredictability of the markets, and “investors don’t like uncertainty.” 

“The July rally was just an interlude, fueled purely by short-term opportunities and not long-term positioning of major players,” Hiesboeck says.

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