Investors are eagerly awaiting the decision of the US Federal Reserve Industry observers are expecting a bigger rate hike. What does this mean for cryptocurrencies like bitcoin, ethereum and altcoins?
Crypto & the FED: Shaking before the interest rate is determined
Inflation is rampant in the United States: data released last Friday show the general price increases have gone completely out of control. They are now at 8.6%, the highest level since 1981.
The pressure on prices is so great that the central bank may decide to raise interest rates tonight, so it’s cause for concern. Fed Chairman Jerome Powell explains:
“We will have to be flexible with the incoming data and the changing outlook.”
The big question many investors are asking now is: Will the feed already raise interest rates by 0.5% or 0.75%? The US Federal Reserve will give the answer today at 8 pm
To date, the Fed has appeared to raise interest rates by 0.5 percentage points. Recently, however, a 0.75 percent increase was also discussed. Due to a new regulation (“blackout”), central bank employees are no longer allowed to comment publicly on this.
The Fed appears to be sending relevant information through other channels. For example, the Wall Street Journal writes: The Fed is considering a 0.75% rise.
The biggest banks on Wall Street are now counting on it too, like JP Morgen Chase or Goldman Sachs, as chief trader Michaël van de Poppe writes to more than 610,000 Twitter followers. However, he considers himself a 50 basis point increase more likely.
“JP Morgan is expecting a 75 basis point rise on Wednesday.
I would say that is unlikely to happen and 50bps or less will start the reversal in bitcoin. ”
JP Morgan expects a 75bps hike for Wednesday.
I would say that is unlikely to happen and 50bps or less is going to change #Bitcoin.
– Michaël van de Poppe (@CryptoMichNL) June 13, 2022
At the same time, the European Central Bank (ECB) has decided to hold an ad hoc meeting next Wednesday – it is still ongoing at the time of writing. Aim of the special meeting: analysis of current market conditions and nutrition determination. It is hoped that measures will also be developed here.
Fed interest rate determination: Danger to crypto?
The Fed interest rate decision is of course a major concern among crypto investors it could lead to new casualties or even another landslide accident. Crypto markets have been in recession in recent months, with recent sales hitting alarming proportions.
For example, the “Crypto Fear and Greed Index” is currently “terrified”, showing: Investors are more lazy than they have been for years.
Bitcoin is currently trading after a loss of almost 10% with the last 24 hours at $ 20,208 and so just above the psychologically important $ 20,000 mark (And: What if Bitcoin falls below $ 20,000?).
Ethereum is also struggling: After a massive 43% weekly losses (!), The smart contract platform is just over $ 1,000.
Cryptoquant analyst Furkan Yildirim comments: Fed pricing rate decision is already priced at more than 90%.
“There has already been a 75 basis point interest rate rise of over 90%.
A 0.5% increase could provide a short replay. ”
A 75 basis point rate has already risen to a price of over 90%.
An increase of 0.5% may bring back a summary.
– Furkan Yildirim | CCTV (@FurkanCCTV) June 14, 2022
So the FED decision may not have any direct effects on the prices of cryptocurrencies such as Bitcoin and Co.
Last updated June 15, 2022
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