A recession is an extended period of significant economic activity decline. It’s typically characterized by a contraction in gross domestic product (GDP), rising unemployment, reduced consumer spending, and declining business investment.
During a recession, individuals may experience job losses, wage cuts, and decreased purchasing power, leading to lower living standards and increased financial hardship. Businesses face challenges such as declining revenues, reduced profitability, and difficulties accessing credit, often resulting in layoffs, bankruptcies, and reduced investment in expansion or innovation.
The impact of recessions on cryptocurrency markets is not easy to predict as it can be complex and multifaceted. While Bitcoin and other crypto-assets are sometimes presented as a potential hedge against traditional market risks, their performance during recessionary periods can be unpredictable due to their speculative and volatile nature.
In addition, the growing adoption of crypto-assets and financial instruments like the Bitcoin ETF may also lead to a higher correlation between crypto and traditional assets, possibly causing the assets to move in a more coordinated way.
Recessions can exacerbate volatility in markets as investors react to shifting economic conditions and market sentiment. The speculative nature of cryptocurrencies, coupled with their relatively small market size, can amplify price swings during times of economic uncertainty, potentially leading to both rapid gains and steep losses.
Describes how authorities adjusts the tax rates of a country, influencing how public funds should be collec...
Refers to the policies that authorities create and adopt to control the money supply and interest rates of ...
A Consumer Price Index (CPI) is a measure used to track the effects of inflation over a period of time.