The US economy’s recessionary fears are sending shockwaves across various asset classes, with Bitcoin and the broader crypto market experiencing significant drops. Ethereum’s price has recently plummeted by 6%, falling below the $3,000 mark, a level not seen since early July. Over the past week, Ethereum has declined by over 8.5%, with analysts predicting further losses ahead.

Peter Schiff: Ethereum Could Drop to $2K

The spot Ethereum ETFs have witnessed substantial outflows in the two weeks.Renowned economist Peter Schiff pointed out the poor performance of Ethereum ETFs, which have dropped over 15% within two weeks. As Ethereum’s price remains below $3,000, Schiff forecasts a potential crash to $2,000.

On Friday, data from Far side Investors revealed that the spot Ether ETF experienced net outflows of $54.3 million. Grayscale’s Ethereum ETF saw outflows of $61.4 million, while Fidelity’s FETH had inflows of $6 million. All other Ether ETFs in the US recorded zero inflows that day.

Peter Schiff, known for his preference for Gold, seized this moment to suggest that a US recession could be bullish for Gold prices. He explained that a recession could lead to larger federal budget deficits, a weaker dollar, collapsing real interest rates, and higher inflation. Furthermore, Schiff believes the Federal Reserve might revert to quantitative easing to monetize debt, stimulate the economy, and support markets, which could drive Gold prices higher.

Interestingly, former President Donald Trump proposed issuing crypto checks to reduce a portion of the US’s $35 trillion debt.

Altcoins Suffer Heavy Losses

Alongside Ethereum, the rest of the altcoin market is experiencing significant corrections, with top altcoins falling between 5-10%. Despite altcoin whales buying the dips recently, trading volumes have not seen a substantial increase.

Crypto Quant’s altcoin analyst Kate Young Ju noted the formation of buy walls for altcoins paired against Bitcoin and stable coins. However, she pointed out that trading volumes remain low.

Young Ju emphasized that while buy walls are a positive indicator, the much-anticipated “alt season,” characterized by a surge in trading volume, has not yet arrived. She suggested that this could be a good time to research promising altcoins and prepare for the next bull run.

Additional Information

Gold as a Safe Haven

In times of economic uncertainty, investors often turn to Gold as a safe-haven asset. Schiff’s prediction aligns with historical trends where Gold prices tend to rise during recessions. The potential for higher inflation and weaker currency values only adds to the appeal of Gold as a stable investment.

The Role of the Federal Reserve

Schiff’s analysis includes a critical view of the Federal Reserve’s potential actions during a recession. The return to quantitative easing could involve purchasing government securities to inject liquidity into the economy, which might lower interest rates but also increase inflation. This scenario could lead to higher Gold prices, making it an attractive option for investors seeking to hedge against inflation.

The Crypto Market’s Volatility

The current volatility in the crypto market is not unusual. Cryptocurrencies are known for their rapid price movements, influenced by various factors such as regulatory news, market sentiment, and macroeconomic trends. Schiff’s prediction of Ethereum’s decline is a reminder of the inherent risks in the crypto market.

Preparing for the Next Bull Run

Investors looking to capitalize on the next crypto bull run should consider conducting thorough research on promising altcoins. While the current market conditions may not favor immediate gains, building a strong portfolio of high-potential altcoins could prove beneficial in the long term.