Robert Steinadler, 2 months ago
Today was the big day and the Fed once again set the direction for the markets. What is the result of today’s FOMC meeting and how did it affect crypto?
According to the CME Fed Watch Tool, it was expected that the Fed would raise the rates by 25 bps for the vast majority of market participants. The last FOMC meeting already hinted that the Fed would go easier on the market while at the same time staying committed to combating inflation. The result fully met the expectations of analysts and the market reacted slowly to the news.
Traders as well as the broader media will have to wait just a little bit longer until Jerome Powell speaks once again during the press conference. It is expected that the tiniest hint from Powell on how the Fed is going to proceed could cause volatility. That being said, cautious investors might want to avoid the market under these conditions since a misinterpretation of Powell’s speech could lead to an unpleasant result in trading.
At the time of writing no unusual price swings were spotted and it appears that the market is reacting neutrally to the breaking news. However, this could change once the press conference is going to start.
It might seem a little bit odd that the Feds policy is influencing the value of cryptocurrencies, which are anti-establishment investments. Since the crypto market matured within the last few years this is nevertheless totally normal and nothing to worry about.
Generally speaking, crypto is viewed as a risk asset and this also explains why there is a strong correlation between tech stocks and crypto. Both are categories that promise a high return to investors but carry higher risks than other assets.
The Fed made a decision and it is neither good nor bad, it simply influences the expectations of market participants. That being said, inflation and the monetary policy are closely tied together. Crypto investors should watch out for the next Q4 reports of big companies like Apple, Alphabet, and Amazon starting tomorrow. It is expected that their results will give a hint on whether an economic crisis will deepen or if it can be avoided. Of course, the release of US CPI data for January will also be a highly anticipated event.
Mar 22, 2023
Today it was about that time again. The FOMC meeting came to an end and once again the press conference with Jerome Powell was highly anticipated. Why was this recent decision perceived as important by many analysts and how did Bitcoin and the market react?
Mar 21, 2023
Will the American Central Bank on Wednesday raise interest rates with another 0.25%? In a banking sector that's under severe stress, even higher interest rates could squeeze banks and even undermine trust in the entire financial system. At the same time, inflation hasn't come down to the target of 2%, which demands more interest rate hikes - at least in the opinion of the Fed.
Mar 15, 2023
ChatGPT is perhaps the hottest overall tech trend this year. Everybody is using it and everybody is discussing its limitations, bias, and capabilities. AI is not only changing how we are using our computers or the internet. It will also change how we work. ChatGPT is already able to design and program applications, websites, and even news articles. This is astonishing and promising at the same time. It looks like the hype has also reached crypto and once again AI related tokens were pumping on news.
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