Crypto pendulum swings back to 'real economic value'

After briefly touching $17,409 over the weekend, Bitcoin is back above $20,000.

However, can the price outlook recover as recession calls grow and inflation continues to dominate market headlines? Looking at price forecasts for 2022, bitcoin will not be comfortable in a recession, according to Stablecorp CEO Alex McDougall. He doesn't think there's gonna be a huge retail push or flight into Bitcoin in a recession. At the same time, institutions who have finally gotten on board aren't selling.

During stagflation, a period described by slowing growth and high inflation, Bitcoin is likely to fluctuate within a price band. "I don't think it will completely crash in a recession. Instead, it will consolidate for the next round of upside," McDougall noted.However, if the US economy enters a period of stagflation accompanied by a continuous rotation out of risk assets, there could be more pain for the crypto space, including Bitcoin, Stablecorp CEO noted.Despite the crash, there is still enough capital in the space to move these real-value crypto projects forward, he added.On the technology side, McDougall sees it overtaking the future of finance at some point. Going forward, the dueling narratives of crypto will continue to push prices in different directions. These narratives often drive prices. The latest market mover has been this dual narrative of crypto being viewed as a tech stock but also as a risk-off asset and an inflation hedge.So, we end up with this crazy volatility based on which buyers are driving the narrative.Additional price volatility will be hard to swallow for the crypto industry. It would highlight challenges with centralized lending platforms and Ethereum staking liquidity services, McDougall pointed out.For Bitcoin, specifically, McDougall pointed out that its payment currency narrative is done. However, its store of value thesis and Bitcoin being the anchor for the entire industry is just getting started.Crypto is an entirely different fundamental value proposition than stocks.