{"id":425234,"date":"2020-05-27T16:00:32","date_gmt":"2020-05-27T16:00:32","guid":{"rendered":"https:\/\/wncen.com\/?p=425234"},"modified":"2020-05-27T12:27:25","modified_gmt":"2020-05-27T12:27:25","slug":"crypto-comeback-economic-risk-on","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/crypto-comeback-economic-risk-on\/","title":{"rendered":"Crypto Comeback: Chief Economic Adviser Optimistic Over Renewed Risk-On Tone"},"content":{"rendered":"
When the pandemic first struck, crypto investors feverishly began reducing overall risk across their asset portfolio.<\/p>\n
This sentiment has since changed, and with it the has the tone of a chief economic advisor who previously told investors to “buckle” up, and prepare for the worst. The increase in risk-on interest may help the high-risk asset class of cryptocurrencies stage a long-overdue comeback.<\/p>\n
Fearing the unknown and uncertain about the future impact lockdown conditions would have on the economy, an investor mad dash to sell anything and everything resulted in a liquidity crisis now known as Black Thursday<\/a>.<\/p>\n The massive selloff crushed the stock market and even precious metals gold<\/a>, silver, palladium and more. The continued economic constraints also fueled a severe drop into negative territory in the oil market.<\/p>\n Related Reading | Mark Cuban\u2019s $4,000 Trickle Up Stimulus Could Provide Boost For Crypto<\/a><\/strong><\/em><\/p>\n High risk, illiquid crypto assets like Bitcoin<\/a>, Ethereum, and many others, were decimated in the collapse. Chainlink flash crashed to nearly zero in the madness.<\/p>\n But the economy is now reopening, the curve is flattening, and investors are once again taking on risk, according to Mohamed El-Erian, chief economic adviser at Allianz.<\/p>\n Citing “good news across the board,” the economist says<\/a> he is now seeing positive, “risk-on tone, which we haven\u2019t had really for quite a while.”<\/p>\n Though he warns the economic recovery will not be a “smooth process” there is “big hope” that the return to risk-on sentiment is sustainable. This is a far more an optimistic outlook than the tone El-Erian took previously, warning investors to “buckle our seat belts.”<\/p>\n The return to risk will see stocks continue to rise, but potentially cryptocurrencies to surge.<\/p>\n After over two years of a downtrend, these assets are oversold and had been midway through making a recovery from low prices when Black Thursday struck.<\/p>\n The crypto asset class has recently come into the spotlight with institutional investors due to their hard-capped, digitally scarce supplies. Assets with limited supply can act as a hedge against inflation as the Fed adds trillions to its budget sheet.<\/p>\nCrypto Comeback Possible If Risk Appetite Sustains<\/h2>\n