- Peter Schiff warns that a looming US recession could drive Ethereum’s price down to $2,000 amid significant ETF outflows and overall market decline.
- Despite some positive signs from altcoin buy walls, trading volumes remain low, delaying the anticipated altcoin season.
Peter Schiff, a renowned economist and gold advocate, has issued a dire warning about the future of the cryptocurrency market amid growing concerns of a US recession. Schiff’s analysis suggests that the ongoing economic downturn could severely impact the crypto market, with Ethereum potentially crashing to $2,000.
Ethereum’s Decline and ETF Outflows
The past few weeks have been turbulent for Ethereum (ETH) investors. The price of ETH has dropped by over 8.5% in just one week, plummeting below the $3,000 mark—a level it hasn’t seen since early July. This decline has been exacerbated by significant outflows from spot Ethereum ETFs, which have fallen by more than 15% in the past two weeks. Data from Farside Investors indicates that the spot Ether ETF saw net outflows of $54.3 million, with Grayscale’s ETH witnessing $61.4 million in outflows. Despite these declines, Fidelity’s FETH saw $6 million in inflows, though other Ether ETFs in the US saw no inflows.
Peter Schiff highlighted these ETF outflows as a sign of Ethereum’s weakening market position. He predicted that if current trends continue, Ethereum could further drop to $2,000. Schiff’s analysis ties the potential crash to broader economic factors, particularly the looming US recession.
Recession Fears and Gold’s Rise
According to Schiff, a US recession could actually 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 much higher inflation. Schiff believes the Federal Reserve may return to quantitative easing to monetize debt, stimulate the economy, and prop up markets—conditions that traditionally boost gold prices.
Altcoins Suffer Amid Market Turbulence
Ethereum is not alone in its struggles; the broader altcoin market is also facing significant corrections. Top altcoins have fallen between 5-10%, with trading volumes not yet ripe for a rally. Despite some altcoin whales buying the dips, the anticipated “alt season,” marked by a surge in trading volume, has not materialized.
CryptoQuant analyst Kate Young Ju has observed the formation of buy walls for altcoins paired against Bitcoin and stablecoins. However, she noted that trading volumes remain low. Ju emphasized that while buy walls are a positive sign, they are not sufficient to trigger the much-anticipated altcoin season. She advised investors to use this time to research promising altcoins and prepare for the next bull run.
Buy walls are forming for altcoins with both stablecoin and #Bitcoin pairs, but volumes are still low.
— Kate The Alt (@kate_young_ju) August 2, 2024
If alt season means a surge in volume, it's not here yet.
Now's the time to research promising alts for the next bull run—time might be short once Bitcoin hits a new ATH. pic.twitter.com/v1133n6G9L
As recession fears loom, the crypto market faces significant challenges. Peter Schiff’s predictions of Ethereum crashing to $2,000 and a broader altcoin downturn highlight the need for caution and strategic planning among investors. While the immediate future looks bleak, these market conditions also offer opportunities for savvy investors to position themselves for potential gains in the next bull run.
