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With inflation still persistent, it is emerging as an attractive option for portfolio diversification in a macroeconomic environment, analysts said.
Bitfnex head of derivatives Jag Kooner said various macroeconomic headwinds in 2024 could strengthen the safe-haven status of assets such as Bitcoin, gold and silver. “Sustained inflation levels that remain above the comfort zones of central banks around the world are expected to result in a prolonged period of interest rate increases. This scenario is likely to temper current market expectations of an early easing of monetary policy in advanced economies, which investors are concerned about. “It may cause disappointment among people,” he added.
In an email to The Block, Kooner outlined a variety of headwinds that could derail market growth in the year ahead. He added, “The stock market outlook looks more difficult ahead of 2024. Factors such as moderate profit growth and various geopolitical risks are expected to put downward pressure on the stock market.”
His prediction is that 2024 will be a year of moderate growth. “Earnings growth for the S&P 500 will only be modest in the 2 to 3 percent range, and the index target is 4,200 and there may be a downward bias,” he said.
Potential Macroeconomic Headwinds
TRES co-founder Tal Zackon told The Block that the newly approved spot Bitcoin ETF makes it easier for traditional investors to use Bitcoin as a hedge against inflationary pressures.
Zackon also outlined several factors supporting Bitcoin’s status as a safe haven amid uncertain macroeconomic conditions.
He added, “The Bitcoin halving scheduled for April, a unique mechanism for limiting supply, reaffirms Bitcoin’s potential as a powerful anti-inflation tool.”
Upcoming Bitcoin Halving Event
Bitcoin was trading at $50,890 at 5:40 PM ET, according to The Block’s pricing page. The GM 30 index, which represents the top 30 cryptocurrencies, fell 0.92% to 112.43 over the past 24 hours.
Bitcoin price has fallen more than 1% in the last 24 hours. Image: Block.
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