Robert Steinadler, 7 months ago
The biggest factor this year that determined the Bitcoin price was the crypto drama that unfolded in 2022. With the FOMC meetings and the release of the inflation data, a second factor came into play that wasn’t exactly bullish this year either. Yesterday, the Fed released the FOMC meeting minutes, and a couple of remarks gave hope that a pivot may be closer than we think.
Why is the FOMC meeting so important, and what were the results of the last meeting?
The Fed has basically only one tool to counter inflation, and by raising the interest rate, nearly all markets are hurt at some point. This is why not only crypto is suffering, but also stocks and bonds didn’t do too well throughout the year.
Markets are driven by investor expectations, and for the last 11 months, they were all looking for a sign that Fed could initiate a pivot. No such thing was in sight until yesterday’s meeting minutes were released.
The result isn’t turning heads, but the Fed is considering a smaller rate hike, lowering them from 75 bps down to 50 bps. Of course, this means that inflation is still nowhere near the target of 2 %, and rate hikes will continue. The fact that the Fed is showing a willingness to go easy on the market was a relief, and stocks, as well as Bitcoin and crypto, recovered a little bit.
Optimists see bottom signals everywhere, while pessimists are fearful that the crypto drama around Genesis Trading and DCG could produce yet another disaster. The observation that any more bad news could damage the market and the trust of investors further is correct. Still, we don’t know the future and the fact that crypto recovered on the Fed news is a good sign.
It means that the crypto market is not only driven by the downfall of FTX and other companies. Positive internal and external events can still push the market in the right direction. In conclusion, as soon as the worst part of the recent events involving FTX and other companies is settled, there is a chance that crypto could celebrate a comeback, depending on the economic environment.
The fact that many companies and startups are still building their dApps and products is a good sign that crypto is here to stay.
May 19, 2023
Ripple is still fighting the SEC in court over the question of whether XRP is a security or not. While it is expected that the lawsuit will come to an end this year, the company is making big moves on the international market. Recently the company acquired Metaco, one of the big players in institutional custody solutions for digital assets. The deal fits perfectly into the bigger picture. Ripple has always focused on providing solutions for international payments and remittances. Solutions that are meant for institutional customers and not retail clients.
May 03, 2023
Today was the big day, and many traders spent their time in front of their screens waiting for Jerome Powell's speech during the press conference. Another FOMC meeting concluded, and another interest rate hike was announced.
May 01, 2023
Being believers in crypto we favor decentralization, so we don't like the current developments in the USA. Another relatively smaller bank went bust and will be acquired by JPMorgan, the biggest bank of the country.
Apr 25, 2023
The U.S. government reached its self-imposed debt limit or debt ceiling of $31.4 trillion (!) in January 2023. This has forced the US Treasury measures to 'pay out of pocket' to keep the government keep its obligations. The political uncertainty surrounding this debt ceiling is the reason the insurance premium against the US going bankrupt is at the highest price ever.
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