Macroeconomist Alex Krüger doesn’t think crypto is destined to wallow in a long bear market.
In a new thread, Krüger tells his 179,000 followers on the social media platform X that digital assets are facing three possible historical scenarios after suddenly plunging in price over the weekend.
The first scenario occurred in March 2020, when crypto prices cratered due to the coronavirus but then recovered within two months, kicking off one of the biggest bull runs in the history of the sector.
The second was in May 2021, when Bitcoin (BTC) crashed by more than 30% after hitting a new all-time high in April. Crypto assets continued to tick downward in price until late July when the sector reversed course on its way to new highs that November.
The third happened in May 2022, when the Terra ecosystem imploded and sent crypto assets spiraling down an extended six-month price plunge.
Krüger thinks the third scenario is the least likely and predicts crypto will follow the quick-recovery path of the first option, though “without expecting the wild performance of 2020-21.”
He also notes that he doesn’t believe the US economy is headed for a recession, which would push crypto prices down even further.
“We just saw the entire world experience a crypto-style leveraged flush out. That was it. Life goes on. Unless there is a recession ahead, which is possible yet unlikely at this point.
In that case, this was just a first sample. That means, pick your camp: recession or no recession. And act accordingly. I’m in the no-recession camp. Will be paying extreme attention to all US jobs data points. We are now firmly in a ‘bad economic data is bad for prices’ trading environment.”
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