Strong GDP Numbers May Be Bearish for Crypto – Here’s Why

The Fed is expected to continue raising interest rates, although at a slower pace, delaying the shift in policy traders have been eyeing

article-image

FOTOGRIN/Shutterstock.com modified by Blockworks

share

Crypto and equities markets whipsawed during Thursday’s session as traders leaned more risk-off and speculated what strong GDP numbers might mean for interest rates going forward. 

Preliminary data shows economic growth remained stable during the last quarter of 2022, beating expectations and posting only a moderate decline from the previous period.

The US Commerce Department just reported initial gross domestic product (GDP) numbers, which showed a 2.9% annual rate of economic growth, adjusted for inflation. Several revisions to the data are expected in the coming months. 

The Federal Reserve is expected to continue raising interest rates, although at a slower pace, delaying the shift in policy traders have been eyeing. As of Thursday afternoon in New York, markets were pricing in a 99% chance of a 25 basis point increase next month. 

“The market’s obsession with rates and inflation, and their implications for the dollar, leads me to believe that this ultimately ends up bearish for asset prices,” Darius Tabatabai, CEO of decentralized exchange Vertex Protocol, told Blockworks. “A strong GDP print will serve as a warning around potential inflation risks, and most likely embolden hawks on the FOMC.”

Tom Siomades, chief investment officer of AE Wealth Management, agreed, noting that continued lagging unemployment is not helping the case for the Fed to pause interest rate increases anytime soon. The trend means investors will be more likely to allocate to safer investments, he added. 

“Expect fixed income, quality and dividend paying stocks to do well as this tug of war between when the Fed stops and how high it may raise rates continues for the next few months,” Siomades said. 

Downward trend for crypto still on the cards

Markets traded mixed on the GDP news, with the S&P 500 and Nasdaq Composite indexes initially falling before rallying around 0.5% and 1%, respectively, later in the session. 

Bitcoin remained mostly flat, trading about 0.2% lower Thursday afternoon in New York, while ether lost around 1%. A downward trend for cryptos would not be surprising, analysts said. 

“Given recent price action, we could see some reversal in the movements of the last few weeks — which would likely lead to crypto prices heading lower,” Tabatabai said. 

“Indeed, this is already happening, and I’d expect rate sentiment to be hawkish for longer than the market expects; especially with the FOMC likely to favor inflation fears over recessionary concerns.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Pipe Network is a decentralized content delivery network (dCDN) that replaces the sparse, capital intensive data center footprint of traditional CDNs with a permissionless mesh of independent node operators. By orchestrating under-utilized resources that already exist at the edge, rather than purchasing or leasing thousands of servers, Pipe slashes capital intensity while letting supply expand autonomously in the places where bandwidth is scarcest and most expensive.

article-image

Sponsored

Fluence is a decentralized marketplace that connects businesses requiring enterprise-grade computing power with professional infrastructure providers

article-image

What if growth goes exponential while you’re hiding in gold and bitcoin?

article-image

While Compass Point analysts downgrade its Circle price target, Jefferies initiates Galaxy coverage with ‘buy’ rating

article-image

Friday News potpourri: Here’s what’s shaping up across Bitcoin, Ethereum and beyond.

article-image

A little inside baseball about crypto news