Further economic deterioration could boost crypto if it moderates the Fed tightening outlook

US GDP growth data released this Thursday revealed that the US economy shrunk at an annualized pace of 0.9% in the second quarter

That marked a second successive quarter of negative GDP growth in the US after the economy shrunk at an annualized pace of 1.6% in the first quarter

Moreover, while consumer confidence has been in the dumps and inflation-adjusted consumer spending stagnant for a while amid the bite of high inflation

At current levels around $23,800, Bitcoin is trading over 35% higher versus its June lows in the $17,500 area. Meanwhile, at current levels above $1,700

Amid growing evidence that the US is entering/already in a recession, optimism is growing that sky-high inflation may have peaked

Money markets, which can be viewed as the market’s view on where the Fed will take interest rates, have subsequently moderated bets on tightening for the rest of 2022 and in 2023

If the Fed starts to give credence to such bets by coming across as more dovish at its last few meetings in 2022, that could result in a further easing of financial conditions