This year, bitcoin and cryptocurrencies have fallen along with stock markets as investors prepare for a more militant Federal Reserve system (the investor’s main “contenders” for the world’s dominant cryptocurrency have surprised many).
The price of bitcoin lost about 40% from a peak of almost $ 70,000 for bitcoin at the end of last year, and the price of ethereum also fell almost twice. Other major coins – including BNB Binance, XRP Ripple, solana, cardano, Terra luna and avalanche – also fell, wiping $ 1.2 trillion from the unified cryptocurrency market in a matter of months.
After Federal Reserve Chairman Jerome Powelll, pointed out that the increase in interest rates by half a percent was expected at next week’s meeting, the market expects the central bank will begin to reduce its huge portfolio of loans, assets of $ 9 trillion in the fight against rapid inflation.
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Federal Reserve Chairman Jerome Powell has signaled that the central bank is likely to raise interest rates […] [+] by half a percent at the next meeting, putting pressure on the prices of bitcoin, cryptocurrency and stocks.
“Macroeconomic uncertainty has led to a decline in all risky assets over the past few months, including bitcoins,” said Joe Haggenmiller, head of markets at XBTO Group, a leading cryptocurrency company.
“Bitcoin price volatility over the past few weeks is largely due to its correlation with other risky assets that have changed in response to the conflict in Ukraine, blockchain supply problems due to rising Covid cases in China, and continued interest rate hikes and future fraud. Federal Reserve System with balance. »
At the beginning of the Covid-19 pandemic, The Federal Reserve has launched an unprecedented stimulus program that has doubled its balance sheet and brought interest rates to a historic low as it has filled markets with liquidity in an effort to offset the economic damage from Covid-19 and quarantine. As the pandemic began to subside and inflation rose, the Federal Reserve worked to cool the economy.
“In my opinion, it is advisable to act a little faster [que la Fed ne l’a fait récemment] Powell said last week after a debate with European Central Bank President Christine Lagarde, organized by the International Monetary Fund, adding that he believes “there is something with the idea of loading these movements upstream.”
However, economic data this week showed that the US economy contracted in the first three months of the year by 0.4% in the first quarter, which was the weakest quarter since the first days of the pandemic.
“In my opinion, this is optimistic for risky assets such as bitcoin and stocks, as the Federal Reserve may become less brazen to prevent a recession,” wrote Marcus Sotiriou, an analyst at global digital asset broker GlobalBlock. United Kingdom, in an email. Note.
Traders of bitcoin, cryptocurrency and stock market are closely watching for any signs of this fed will withdraw from its telegraph movement when it meets this week.
“An increase of more than 50 basis points, which deviates from the current consensus, could reduce risky markets, including bitcoin,” Haggenmiller added. Nevertheless, the bitcoin market has been relatively stable over the long term during periods of uncertainty. »
The price of bitcoin has fallen sharply from an all-time high, pulling down the price of another major…. [+] ten cryptocurrencies: ethereum, BNB, XRP, solana, cardano, luna and avalanche.
Meanwhile, the bitcoin and cryptocurrency community has approved a number of positive developments this week, including the Central African Republic. second country after El Salvadorr to accept bitcoin as a legal tender and investment giant Fidelity, which announced the launch of bitcoin accounts 401 thousand.
“Bitcoin has recently reached a new stage of expansion: companies and countries are now integrating bitcoin without waiting for the price of bitcoin to soar,” said Alex Adelman, general manager of the Lolli Bitcoin Rewards Program.
“This lack of correlation between price movements and the growing proliferation of media shows that more and more institutions are realizing the great value of bitcoin as a currency and repository, as well as its inevitable and powerful role in our financial future. »
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