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Ark Invest CEO Cathie Wood predicts the market is headed for a “deflationary boom,” a period of economic growth and simultaneous falling prices driven by increased productivity from technology and innovation.
Her prediction comes despite a crypto and stock market crash triggered by US President Donald Trump’s tariff war against Canada, Mexico, and China.
That’s prompted Wall Street investment banking giant JPMorgan to raise the odds of a US recession to 40%, from 30% previously.
Cathie Wood Says US Economy In “Last Leg Of Rolling Recession”
The US economy is in the ”last leg of a rolling recession” that will give the Trump Administration and the Powell Fed more freedom to cut interest rates than investors expect, Wood wrote in a March 10 post on X.
The Fed’s greater room for manuever will combine with technology-driven innovation to spur a ”deflationary boom” in the second half, she said.
“This bull market will continue to broaden out and perhaps become one of the strongest bull markets in history if we are right that real growth accelerates as inflation maybe even turns negative thanks to these new technologies,” she said in the latest episode of Ark Invest’s ”In The Know.”
Solaxy Positioned As The Biggest Innovation In The Solana Ecosystem
The technology-driven innovation that will help spur Wood’s deflationary boom is what a new crypto project called Solaxy (SOLX) is bringing to Solana.
Solaxy is the first layer 2 scaling solution for the Solana network, and it aims to fix the congestion issues that are hampering its operations.
The project will shift Solana’s transaction processing workload off its layer 1 network and onto its own sidechain. Using ZK rollups, Solaxy will then bundle SOL transactions and submit the batches of transactions back to the Solana network for final validation.
That will increase transaction speeds on Solana, slash fees, and increase capacity, resulting in a win-win for anyone who transacts on the popular blockchain.
That’s much like the outcome Wood sees for the broader economy in the second half of the year.
Solaxy will also bridge the Solana and Ethereum networks. This will create a new ecosystem that combines Ethereum’s robust security framework and thriving DeFi ecosystem with Solana’s speeds and cost efficiency.
The potential merge of two of the most prominent networks in the crypto space will lead to the creation of a new super Web3 ecosystem that is capable of meeting the fast-growing demands of meme coin and decentralized app developers.
The new Web3 infrastructure could very well usher the digital asset sector into a new era of innovation.
Investors seem to have caught on to this, and have already poured more than $25.84 million into the Solaxy presale.
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