Data from the third quarter showed that the real GDP of the United States grew by 4.3% year-on-year, surpassing expectations that indicated 3.3%, as well as the previous quarter's rate of 3.8%.
Despite the fact that these numbers reflect the resilience of the U.S. economy, the cryptocurrency markets reacted negatively, recording a noticeable decline. This disparity raises a fundamental question: why does an improvement in economic indicators sometimes lead to pressure on high-risk assets?
Strong economy... but at a cash cost
Strong growth in GDP means that the U.S. economy is still able to expand without entering a sharp slowdown. However, this strength carries an important signal for monetary policymakers: inflationary pressures may remain, or at least have not declined enough to justify a rapid easing of monetary policy.
In this context, it becomes likely that the Federal Reserve will continue its cautious approach, keeping interest rates at elevated levels longer than markets had hoped. Here lies the turning point in investor sentiment.
Why are cryptocurrencies specifically affected?
Cryptocurrencies are classified as high-risk assets, and historically benefit from periods of high liquidity and low interest rates. When economic data indicates a strong economy, it means:
Delay in interest rate cuts
Continued rise in bond yields
Increased appeal of the dollar and traditional instruments
These factors drive investors to reduce their exposure to volatile assets, notably cryptocurrencies, in favor of less risky assets.
The psychological dimension and short-term market movements
Markets had built part of their previous expectations on a scenario of gradual economic slowdown that opened the door for easing monetary policy. However, GDP growth exceeding expectations temporarily dispelled this scenario, leading to:
Rapid repricing of expectations
Closing speculative positions
Short-term selling pressures
Thus, the decline in the cryptocurrency market was not an expression of fundamental weakness in this sector, but rather a reflection of a sudden change in expectations of monetary policy.
Is the decline temporary or the beginning of a deeper trend?
From an analytical perspective, this type of decline is often corrective, linked to economic news and monetary decisions, rather than a structural shift in the cryptocurrency market. As long as long-term fundamental factors remain unchanged, these movements are part of the natural market dynamics.
Summary
Strong growth in U.S. GDP reflects the health of the economy, but at the same time limits the prospects for near-term monetary easing, which exerts temporary pressure on high-risk assets, including cryptocurrencies.
And while this paradox may seem confusing to some, it underscores a basic reality in financial markets: what is positive for the macro economy is not necessarily positive for markets in the short term.
