In the latest episode of Cointelegraph's MacromarketsAnalyst Marcel Pechman explores how Turkey's recent interest rate hike could attract hundreds of millions of new cryptocurrency investors and how China's looming economic crisis could affect Bitcoin (BTC) and crypto worldwide.
Turkey's central bank raised the interest rate by between 6.5% and 15% in a dramatic attempt to combat inflation. The move comes as the local currency, the lira, has fallen 80% against the US dollar in five years.
According to Pechman, it doesn't matter if the US dollar maintains its dominant position as the global reserve currency. Turkey and Argentina's 70% inflation in 2022 are perfect examples of how decentralized cryptocurrencies could be the only lifeline for hundreds of millions, if not billions, of people unable to save or transact in foreign currency.
The next part of the show looks at whether China's economic weakness affects Bitcoin and how its central bank digital currency could increase demand for cryptocurrencies. Goldman Sachs economists lowered their estimates for Chinese gross domestic product growth to 5.4%, citing "housing market challenges, widespread pessimism among consumers and private entrepreneurs, and only moderate policy easing."
Pechman shows how the iShares MSCI China exchange-traded fund has been a better indicator of Bitcoin's price and explains the importance of the Chinese economy to global growth. Ultimately, for Pechman, if the Chinese stock market falls, cryptocurrency prices will most likely come under pressure as well.
Lastly, Pechman makes a bullish case for cryptocurrency adoption during a recession, or slower growth, in the case of China, including stimulus checks used to buy cryptocurrency.
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