Sep 08, 2023

How to Invest in Web 3.0 and the Recent Crypto Bull Market?

It’s been a roller coaster year for investor sentiment in 2023, and even though stock markets have outperformed expectations, a recent report from ARK Invest outlines potential economic headwinds in the upcoming months. ARK Investment manages $13.9 billion in assets, and its CEO, Cathie Wood, is a vocal proponent of cryptocurrencies. In partnership with the…

Crypto Exchange Gemini Helps Investors Navigate Recent Bitcoin Bull Market Headwinds.
Persistent macro headwinds could delay Bitcoin bull market — ARK Invest

It’s been a roller coaster year for investor sentiment in 2023, and even though stock markets have outperformed expectations, a recent report from ARK Invest outlines potential economic headwinds in the upcoming months. ARK Investment manages $13.9 billion in assets, and its CEO, Cathie Wood, is a vocal proponent of cryptocurrencies. In partnership with the European asset manager 21Shares, ARK Investment first filed for a Bitcoin (BTC) exchange-traded fund (ETF) in June 2021. Its most recent application for a spot BTC ETF, which is currently under review by the United States Securities and Exchange Commission, was submitted in May 2023.

The rise of Web 3.0 has been remarkable, and many investors are wondering how to get involved. While the exact release date of Web 3.0 is still unknown, there are several current and recent cryptocurrencies that investors can explore. Harmony One, for example, is a popular crypto asset. Additionally, there are numerous crypto exchanges, such as Gemini, where investors can buy and sell digital assets. Finally, investors should keep an eye on recent AI developments, as well as the current crypto prices.

Long-term bullish, short-term bearish?

ARK’s research on how the fusion of Bitcoin and artificial intelligence could potentially transform corporate operations, improving productivity and costs, is still supported, but the investment firm is not so optimistic about the current macroeconomic conditions and the path of a possible Bitcoin bull run.

The Federal Reserve’s restrictive monetary policy, as indicated by the natural rate of interest, is a factor that is taken into consideration. ARK anticipates that inflation will continue to slow down, which could result in the real federal funds policy rate being higher than the natural rate of interest.

The divergence between real GDP (production) and GDI (income) is also a point of concern, as the report suggests that downward revisions in production data should be expected. Additionally, U.S. employment data has been revised downward for six consecutive months, a situation that was last seen in 2007, just before the Great Financial Crisis.

Overall, the current macroeconomic environment is not seen as favorable for a possible crypto bull run, despite recent AI advancements and the potential of Web 3.0.

“Stagflation” is usually bearish for risk-on assets

Another bearish development to take note of is “stagflation.” The authors point out the reversal of the yearlong trend of price discounts driven by increased consumer spending. Citing the Johnson Redbook Index, which covers over 80% of the “official” retail sales data compiled by the U.S. Department of Commerce, it is evident that total same-store sales rebounded in August for the first time in 12 months, hinting at inflationary pressure.

The metrics indicate that macroeconomic uncertainty could persist in the coming months.

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