Hong Kong, China -- (ReleaseWire) -- 04/15/2021 --In the week from March 29 to April 4, monthly investment inflows into cryptocurrency funds rebounded from a five month low to $106 million, a fivefold increase, according to a new report from digital asset management firm coinshares.The previous week (March 22 to March 28) saw inflows fall to about $21 million, the lowest level since October last year, as horizontal trading in bitcoin and other digital asset markets failed to motivate buyers.The rebound in trading volume brought cryptocurrency fund inflows to US $4.5 billion in the first quarter of this year, a record, about 11% higher than the last quarter of 2020.
The capital inflow of cryptocurrency highlights that the current situation of the global economy is still at a relatively low level. Under the influence of many factors, the capital cannot flow to the real manufacturing industry and the traditional financial industry. However, the massive capital inflow of cryptocurrency fund is generally considered as a self breakthrough of the global economy. In the short term, this breakthrough will continue.
Global economic performance in 2021
From the perspective of the structure of global economic recovery, the pace of vaccination in developed countries is ahead of that in developing countries other than China.The pace of vaccination in the United States is ahead of that in the developed countries in the European Union, and it still plays a positive role in promoting economic recovery and boosting consumer confidence.With the epidemic situation in major overseas economies gradually under control, the global economy has entered the recovery rhythm.
However, due to the limitation of vaccine production line, the economic recovery of the world's major economies in a short period of time is slower than that of Asian countries with better epidemic prevention, and the main factors affecting the service industry, especially tourism, accommodation, catering and other industries, have not completely disappeared.According to the 2021 forecast data made by the world bank, the global economy contracted by 4.4%. In March, 916000 new jobs were created in the non-agricultural sector of the United States, and the unemployment rate fell to 6%, which is the "largest increase in the number of employed people" since last August. In other words, the largest decrease in the number of unemployed people.According to the analysis of American media, the continuous decline of unemployment rate and the continuous increase of employment indicate that the American economy is recovering slowly.The report released by Morgan Stanley recently raised the forecast of US economic growth in 2021 to 8.1%.
On the whole, the global economy is improving, but we still need to deal with the epidemic in the short term. The recovery of the manufacturing industry and the real industry is still in a dormant state waiting for a restart. The short-term "prosperity" caused by the US dollar's quantitative stimulation of consumption can only be understood as the efficacy of "special medicine", but does not have long-term reference value.
Self breakthrough of global economy
In the global economy, when the traditional manufacturing industry and the real industry can not continue to grow, only other industries that are less affected by the epidemic, such as the financial industry, futures market, Internet industry and blockchain industry, will flow funds.Among them, the digital asset field of blockchain industry is more favored by capital because it is less affected by regulation and has more tax policy space for income and investment.
Thus, from mid-2020 to early April 2021, the value of digital assets led by bitcoin increased by more than 300%, which can be said to be the inevitable result of the thinking of the global rich in capital allocation.Reflected in the digital asset trading market, the value of bitcoin has risen from less than $10000 in 2020 to around $55000 today, and hit a high of $60000 several times in March and April 2021.
As global capital drives capital to flow into the cryptocurrency market, capital is also making self breakthroughs. Large capitals, led by Morgan Stanley and Goldman Sachs, are also optimistic about the cryptocurrency market, and are laying out blockchain and digital assets.Capital companies such as Tesla are also deploying digital assets.
The allocation of digital assets by global capital leads to the upsurge of currency market. At the same time, it also makes digital assets enter the global economic field and become another kind of "commodity" based on blockchain technology. It is also the necessity of self breakthrough in the process of global economic contraction.
Market expectation
Based on the above considerations of the global economic environment, the cryptocurrency market will still show a relatively active trading state in the short term, and the market value of major mainstream digital assets will continue to be high.Before the global manufacturing industry and the real economy can not fully recover, the field of cryptocurrency will follow the rising trend of the Internet industry and the financial industry.
In the long run, it will take at least 2022 for the global economy to fully recover. By the end of 2021, major economies such as the United States and the European Union are expected to stop the trend of economic downturn. At that time, some capital will be withdrawn from the currency market and turned to entities, which will lead to a series of turbulence in the currency market.
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