The crypto market rebound this year could have room to run if the US economy manages to achieve a soft landing.

That’s the view of Zach Pandl, the recently appointed MD of research at crypto fund provider Grayscale Investments, who previously worked as a strategist at Goldman Sachs Group.

A scenario of low inflation and steady growth would likely aid risk assets, including crypto, by allowing the US Federal Reserve to lower real interest rates, Pandl wrote in a note. But “if the central bank decides to raise real interest rates further, or if its monetary tightening to date tips the economy into recession, the crypto recovery may pause over the near term”, he said.

Many investors think the Fed’s most aggressive tightening campaign since the 1980s is close to an end as price pressures cool. That prospect helped to fuel a crypto revival earlier this year, as did optimism that the US may allow its first spot bitcoin exchange-traded funds, but the rally has since stalled.

Ongoing regulatory uncertainty over the status of digital assets in the US and stresses in decentralised finance — or DeFi — have also hit sentiment. DeFi relies on blockchain-based software known as smart contracts, rather than Wall Street-style middlemen, to facilitate activities like trading or lending.

Pressure on the native token of key DeFi exchange Curve Finance has stoked concerns about cascading liquidations of positions throughout the embryonic sector. The coin, CRV, fell as much as 8.1% on Wednesday.