The economic winds blowing on Wednesday seemed to be favorable for many altcoins, which rose in price. These included Bitcoin Cash, its cousin Bitcoin SV, and Stacks. In the 24 hours leading up to midafternoon, the trio was up 11%, 8%, and 13%, respectively.
The macroeconomic news pushing coins and tokens higher was a downward revision to the estimate for second-quarter growth in gross domestic product (GDP). The U.S. government’s Bureau of Economic Analysis now believes the economy rose by 2.1% during the period, some distance below the bureau’s initial 2.4% calculation.
A lower trailing GDP figure theoretically reduces the chances that the Federal Reserve will raise interest rates in the future. Cryptos, being considered speculative investments, are assets that can be very sensitive to potential interest-rate changes.
When rates move upward, many market players tend to sell out of the speculative stuff and allocate more to assets considered safer. Conversely, stagnant or even declining interest rates usually increase the investor’s appetite for risk.
It is important to note that not all altcoins are created equal. Some are more sensitive to interest-rate changes than others. Investors should carefully consider the risk profile of any coin or token before investing.
- A downward revision to the estimate for second-quarter GDP growth has boosted altcoin prices.
- Cryptos are considered speculative investments and are sensitive to potential interest-rate changes.
- Investors should carefully consider the risk profile of any coin or token before investing.
- All investors should continue to train those wary eyes on the latest macroeconomic data and projections.
Overall, the economic winds are blowing in the favor of altcoins at the moment. However, investors should continue to train those wary eyes on the latest macroeconomic data and projections.