Ripple's price rose by 4%, while Chainlink, Boink and Jasmicoin gained more than 5%. This surge comes after a report showed that US consumer confidence has fallen to its lowest level in two years. Most consumers are concerned about Donald Trump's tariffs and their potential impact on inflation.
There are also concerns about the job cuts issued by Elon Musk's government efficiency department and its impact on the economy. As a result, consumers fear that the US is heading towards a recession.
Risky assets often perform well during recessions due to the intervention of the Federal Reserve. Historically, the Fed has responded to major "black swan" events by cutting interest rates and implementing quantitative easing.
There are signs that the Fed may signal further interest rate cuts at its meeting next week. The US dollar index and US bond yields continue to fall.
These expectations of interest rate cuts are helpful in explaining why US stocks surged on Friday. The Dow Jones Industrial Average rose 625 points, while the S&P 500 and Nasdaq 100 rose 102 and 400 points, respectively. The Russell 2000, which tracks small-cap companies, rose more than 3%. Notably, gold hit a record high of $3,000 for the first time.
Altcoins such as XRP, Link, Bonk and Jasmy also surged as signs emerged that a government shutdown would not occur in the US. In a New York Times editorial, Senator Chuck Schumer argued that a government shutdown would benefit Elon Musk and Donald Trump, who have pushed for cuts in government spending.
Additionally, these coins are likely to rise because some investors are buying them on dips, as most of these coins have fallen more than 30% from their December highs. In a note to Bloomberg
However, there is a risk that the ongoing recovery in stocks and altcoins is part of a dead cat bounce, a temporary bounce during a broader downtrend. A DCB occurs when an asset in free fall bounces back briefly before resuming its downward trend.
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