Bitcoin could reach record high if this happens in the US – Grayscale

According to Grayscale Research, Bitcoin could revisit its all-time high by the end of this year if the US economy avoids a recession.

This bullish outlook follows a period of stabilization for both crypto assets and the broader financial markets, which had faced sharp declines from Friday, August 2 to Monday, August 5.

Grayscale Predicts Bitcoin Rally

In an August 8 research report, Grayscale analysts expressed optimism about the US economy’s ability to achieve a “soft landing.”

Grayscale also highlighted that changes in the US political landscape regarding the crypto industry could reduce downside risks to valuations, in contrast to previous market cycles.

The company stressed that the potential for significant losses could be more contained even in a weaker economic environment than in past cycles. This is due to the steady demand for newly listed US-listed products and the muted performance of altcoins.

Looking ahead, Grayscale noted that market stability will largely depend on upcoming macroeconomic indicators and central bank actions. Key events such as the Federal Reserve meeting in September and the Jackson Hole Symposium are expected to determine the direction of the market.

Grayscale Research maintains a positive view of Bitcoin’s long-term investment potential despite economic uncertainties. The firm suggests that even an economic downturn could strengthen BTC’s case, especially given the ongoing “undisciplined approach” to monetary and fiscal policies.

The crypto market crash hit ETH harder than BTC

The recent market decline was driven by a disappointing U.S. jobs report in July, which showed a rise in unemployment typical of past recessions, Grayscale says. This led to a sell-off in cyclical assets such as stocks, while safe havens such as US Treasuries and the Japanese yen gained.

Meanwhile, Bitcoin and Ethereum fell, with BTC showing relative strength while ETH underperformed.

Ether’s largest decline was likely due to strong long positions in perpetual futures, built up in anticipation of the SEC’s approval of Ethereum spot ETPs in May 2024. These positions were partially liquidated during the fall, accelerating the fall in prices. Additional pressure may have come from large holders such as Jump Crypto and Paradigm selling their holdings.

Ethereum is currently trading at $2,634.10, down 16.5% over the past week. Meanwhile, Bitcoin is trading at $60,781, down 5% over the past week, as it recovers from a drop on Monday that briefly saw its price below $50,000.

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