A possible Trump victory and increased global liquidity could benefit crypto, the analyst said.
Macroeconomist Lynne Alden argues that a possible victory for Donald Trump in the upcoming US presidential election could be extending the corporate tax cuts.
These tax cuts, passed during Trump's first term as president, are set to expire soon, but could be extended if Trump is re-elected.
“The market is probably saying that a Trump victory will increase the chances of the tax cuts being enacted or permanent,” Alden suggested in a recent interview with Cointelegraph.
That means, “all else being equal, the major potential flaws […] It can be a catalyst for market segments,” she explained.
However, according to Alden, the most important macro-economic factor affecting crypto markets continues to be global liquidity, which has been slowly recovering in recent months.
Citing New York Fed forecasts, Alden expects the Federal Reserve's balance sheet growth to resume in 2025, or “at least the balance sheet will no longer shrink.” That Bitcoin (BTC) price could rise significantly.
“I think we're probably getting there now, but if not, I expect it to happen later this year or by 2025,” she said.
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