2022 was tough! #Stocks & #Crpytos were in a bear market and we entered a #Recession (=negative Growth of GDP in 2 consecutive Quarters)
What does all this mean for #Bitcoin and $SPX #SP500 and how is the outlook for 2023
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First, we want to take a look at the most recent recession before: The Great Recession 2008/2009 that followed the financial crisis of 2007.
The $SPX bear market began in Q4 2007 - the first real selloff happened in Q3 '08 - This was also the first quarter GDP declined. The turning point and final bottom was reached in Q1 '09 when GDP turned positive again and the recession was over.
$BTC didn't exist back then
Current Recession: GDP negative growth happened in Q1 and Q2 '22, whereas Q3 had a growth of +2.9%. Estimates for Q4 are +1.4% - +1.6%
While $SPX had a max. drawdown of -27%, $BTC declined -77%. For btc the FTX crash was an aggravating factor.
What is the outlook: The economy is now being driven by several factors: high inflation and the associated interest rates. these will continue to tighten in 2023. This in turn will have a negative impact on the overall economy and GDP.
Conclusion:
Despite all this, we saw GDP growth continue for the last 2 quarters in a row. The following quarters will be crucial for cryptos and stocks. The downtrend period is not over yet, but 2 consecutive positive GDP quarters are a first step for an end of the bear market.
Music by Stockmoney Lizards 🎶
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