Skip to main content

Fed interest rate decision sends crypto market downhill


 

The recently published minutes of the last Fed meeting are putting the stock market in the red. The crypto market is also bleeding.


No temporary inflation: The monetary authorities of the world reserve currency, the US dollar, have recognized the signs of the times and are holding out the prospect of a faster tightening of monetary policy.


The minutes said that interest rates could rise significantly earlier than planned a month ago. The extensive bond purchases are also to be gradually scaled back from mid-January:


The Federal Open Market Committee (FOMC) has decided to reduce monthly net purchases of government bonds by $ 20 billion and mortgage-backed securities by $ 10 billion, beginning with the purchase program in mid-January .


Statement FOMC Meeting

In addition, the refinancing rates (Federal Fund Rates), which are commonly interpreted as the key interest rate, are to be gradually increased until 2024.



"The participants expect a gradual tightening of monetary policy [...]", it says in the statement of the monetary authorities: inside.


The sudden tightening of monetary policy can be attributed to rising inflation expectations. The rate of price increase is currently 6.8 percent - a figure that the United States last had in the 1980s. In this country too, expectations have recently been raised to 5.3 percent.


Interest rate hikes are pushing markets down


As expected, the markets will give way when the minutes become known on January 5th. Above all, tech stocks are bleeding. The tech-oriented Nasdaq 100 index is 3.3 percent in the red compared to the previous day; if you set the period to 48 hours, you even get 5 percent.


he more broadly oriented S & P500, however, got off a little more lightly. The most important index of the US markets was only 1.8 percent.


ess badly affected: The SPX index.


Tech stocks are typically more sensitive to monetary policy tightening than established stocks. The reason is their higher risk assessment and growth orientation, which require favorable interest rates. Higher interest rates then mean more expensive refinancing and potentially less growth. In anticipation of this connection, investors tend to take refuge in solid stocks.


Bitcoin is giving way in almost double digits


The crypto sector is also affected by the rate hikes. After all, Bitcoin and Co., similar to tech stocks, are considered risk assets. Bitcoin, for example, has lost 9.2 percent - but is still comparatively “solid”.


Coins like Ethereum (13.4 percent in the red) or Polkadot (14.3 percent in the red) are bleeding much more. To make matters worse, the crypto sector usually does not generate any cash flow: Those who invest in Bitcoin are speculating on price gains, but do not expect a dividend payment. So the sale came with an announcement.


Florian Döhnert-Breyer, Managing Director of F5 Crypto , sees it similarly. 


A connection with the latest FOMC publications by the US Federal Reserve is obvious: The prospect of higher interest rates strengthens the USD against other currencies. This has created uncertainty in the global equity market as bonds could become more attractive. The crypto market was also hit and leveraged long positions of $ 133 million were liquidated. Fundamentally, nothing has changed in terms of crypto assets.


If the crash proves one thing, it is the importance of the crypto sector in the global financial sector. At 800 billion US dollars, Bitcoin is no longer a small fish, but rather plays a role in the global financial structure. 


"From our point of view, however, it is particularly exciting to see how this explanation is taken for granted by many analysts and market observers: In our eyes, this shows how far the integration of crypto and traditional financial markets has already progressed."

My Top Picks
Honeygain - Passive earner that pays in BTC or PayPal
MandalaExchange -The Best no KYC crypto Exchange! 
BetFury - Play And Earn BFG for daily Bitcoin and ETH dividends!
Pipeflare - Faucet that pays in ZCash and Matic, Games pay in DAI
Womplay - Mobile dApp gaming platform that rewards in EOS and Bitcoin
Cointiply - The #1 Crypto Earning Site
Torum - Join the latest Social Network and earn TRM for Free! 
LiteCoinPay - The #1 FaucetPay earner for Litecoin 
Upland - Collect Digital Properties & Test Your Skills
LBRY/Odysee - YouTube Alternative that lets you earn Money by viewing videos!
FaucetPay - The #1 Microwallet Platform
FREEBTC - The #1 FaucetPay earner for Satoshi's
FaucetCrypto - An earning/faucet site that pays out instantly
FireFaucet - An earning site that pays better for some than Cointiply
DogeFaucet - Dogecoin Faucet
xFaucet - BTC, ETH, LTC, Doge, Dash, Tron, DGB, BCH, BNB, ZEC, FEY - Claim every 5 minutes
Konstantinova - BTC, ETH, LTC, Doge, Dash, Tron, DGB, BCH, BNB, ZEC, USDT, FEY, 25 Claims Daily

Comments

Post a Comment

Popular posts from this blog

From offchain to offchain: Statechains meets Lightning

  Without a doubt, the most significant off-chain Bitcoin solution is the Lightning network. But in its wake, the statechain has emerged as an intriguing replacement. There is currently a proposal to link the two offchain networks. From an ocean, for example, you can see sunbeams glistening in the water, waves rippling, and possibly a jellyfish drifting toward the light. But you only see a small portion of it. The distance from the sea's surface to its bottom is hundreds of meters. It has dozens of different fish species swimming in it, crabs and starfish crawling on the bottom, shells clinging to rocks, and sea plants climbing up. A completely new world starts where your gaze diverges. You can picture a blockchain like Bitcoin, just like the sea. What you see on the outside is only a small portion of what is actually there; the set of UTXOs (coins) and transaction history that full nodes store are just the beginning of a much larger world. It's the plan, at least. With Bitcoin...
Post a Comment
Read more

Phishing attack on popular crypto sites tries to empty wallets

  Several major crypto sites such as Etherscan, CoinGecko, DeFi Pulse, and others report malicious pop-ups scammers use to try to trick users into connecting their MetaMask wallets. The phishing attack came from a domain displaying the Bored Ape Yacht Club (BAYC) logo. "We are investigating the root cause of this attack to fix the threat as soon as possible," CoinGecko founder Bobby Ong tweeted. The phishing attack appears to have been triggered by a malicious ad script from Coinzilla, a crypto ad network, according to CoinGecko. Etherscan also advises its users not to confirm any transactions that may appear on the website. The attackers attempted to use the hype around the “bored monkeys” non-fungible tokens (NFT) to gain access to the cryptocurrencies of unsuspecting website visitors. Although the websites affected by the scam attempt have reacted in the last few hours and deactivated the advertising pop-up, it is still recommended not to connect your MetaMask wallet to ne...
Post a Comment
Read more

Bored Ape Yacht Club NFTs stolen through phishing on Instagram

  Bored Ape Yacht Club ( BAYC ) developers announced on Monday that hackers have hijacked the official Instagram page of the popular NFT collection and posted links to a fake airdrop. Crypto enthusiasts who connected their MetaMask wallet to the rogue website subsequently had their Ape NFTs stolen. Apparently, the attack was planned to coincide with the one-year anniversary of the BAYC collection. This increased the "perceived credibility" of the phishing link. About 100 NFTs are said to have been stolen in the phishing attack . According to CoinGecko data , the minimum price for a BAYC NFT is 139 Ether ( ETH ) or $400,726. So if reports are correct, over $40 million worth of NFTs were stolen in the attack. These numbers are only the lowest estimate, however, as they are based on the lowest price.  At the time of writing, it was still unclear how the hackers gained access to BAYC's official Instagram account. Social media users have pointed out the importance of two-fact...
Post a Comment
Read more