The US economy grew faster than originally anticipated in the first quarter of 2023, according to revised data released by the US Department of Commerce on Thursday.
Gross domestic product (GDP), the most comprehensive measure of economic activity, increased by 1.3% year-on-year, unlike the previous estimate of 1.1%. The revision reflected stronger consumer spending and business investment than previously reported.
Blofin Academy, a leading online platform for crypto education and analysis, evaluated the impact of the revised GDP data on the crypto market.
Blofin Academy: "FED May Need to Tighten Monetary Policy Further"
Blofin Academy said in a blog post that higher interest rates will make traditional assets more attractive and lessen the attractiveness of cryptocurrencies as an alternative store of value and hedge against inflation.
Analysts evaluated the impact of the latest US data on cryptocurrencies as follows:
“Revised GDP data confirms that the US economy is recovering faster than expected, putting further pressure on the Fed to tighten monetary policy further sooner or later. This does not bode well for the crypto market, which is currently struggling with regulatory uncertainty, environmental concerns and market volatility.”
With the latest economic data showing that the US economy is still "considerable" resilience, the possibility of further interest rate hikes is heating up, which does not seem good for the crypto market. pic.twitter.com/Fot6IFkIjr
— Blofin Academy (@Blofin_Academy) May 25, 2023
A higher GDP growth rate indicates that the US economy is expanding and producing more goods and services. This, in turn, can erode the purchasing power of money, leading to higher inflation. To keep inflation in check, the FOMC may decide to raise the target federal funds rate.
*Not investment advice.