Crypto could benefit if Fed steps in to backstop US stock market: Analysts

The size and scope of the US stock market “gives policymakers a strong incentive to backstop major drawdowns,” said Bitget Wallet COO, Alvin Kan.

Crypto markets could benefit from increased liquidity if the US central bank steps in to support the $75 trillion equity market in a bear market, as it is "too big and too important to fail,” according to analysts.

The US equity market has grown by 68% over the past five years and has added roughly $6 trillion in market value so far this year. However, analysts and experts, such as goldbug Peter Schiff, have warned that years of rapid growth could be setting up the market for a major correction.

Such a correction could see the Fed "break decades of precedent" and buy equity ETFs to support the stock market, Bloomberg's ETF expert Eric Balchunas said on Tuesday, while other analysts said the resulting move to increase liquidity could set up an environment for cryptocurrencies to benefit.

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