The Extreme Headwinds Crypto and All Investments Face This Week

TL;DR The next few days are going to be huge for both the traditional markets and the crypto markets. On Wednesday the House Speaker Race is supposed to be "decided", the Federal Reserve is releasing huge economic numbers on both Wednesday and Thursday, as well as the dynamic situation in Israel could continue to devolve given the various sides and factors at play.

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The rest of this week are going to be pretty brutal for various reasons that can really be broken down into three groups.

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Group One: US House of Representatives

As someone who works in the House, I can say with certainty that due to the uncharted territory that we are in no one is exactly sure what powers the Speaker Pro Tempore has if we are in gridlock until we elect a new Speaker and how long that could possibly take.

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Speaker Pro Tempore McHenry has tried to push the selection along by setting Wednesday as the day for the Republican Party to decide but it is not likely that the Republican Conference will have selected a Speaker who will have the 218 votes needed. As we all know uncertainty is awful on the markets but more importantly to the crypto space Representative McHenry has been spearheading all of the crypto efforts and they were supposed to be brought up for a House vote at the end of Oct. or the beginning of November. Now that seems very unlikely to happen if the Speaker race doesn't wrap up soon as Rep. McHenry has to focus on these Speaker Pro Tempore tasks instead of the crypto legislation that is so close to passing the House.

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Group Two: Fed Data

Another month has passed since the last Fed data and so here we are again. The sentiment and subsequent data from the last time numbers were released have only been worse and have pointed at us getting another interest rate hike. If the data this week with a focus on the Wednesday and Thursday data is bad another 25-point increase is likely.

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Group Three: Increased War, Instability, and Side Taking

With the launch of attacks against Israel and the subsequent civilian deaths (including the sheer number of foreigners that have either been declared dead or have been identified as being taken hostage and moved to Gaza), a huge unexpected mess has exploded onto the scene. Over the last day and a half, we have seen more and more intel come out about the various groups that were either in the loop or participated in these attacks and they range from Hamas in the Gaza Strip to groups in Lebanon and Syria under the control of Iran.

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Depending on how Israel addresses these last few groups with an emphasis on Iran this could quickly and rapidly explode into something that has not been seen in 50 years. With the number of Westerners that have been killed, it could be argued that a second front could be opening up beyond the Ukraine war as Russia has a huge presence in Syria. While it is unlikely that this would result in a WWIII-type event the global markets would freak out and that will have a huge and negative impact on crypto.

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Final Thoughts

This is really the first time in a while that I have seen so many negative events or situations ongoing in the span of a couple of days that could just tank markets across the board. Since crypto seems to be one of if not the first and biggest hit this makes it an extremely rough time for the space because there is not exactly a ton of good news out there.