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Wall Street Analyst: Federal Reserve Controls Crypto & Asset Prices

 


A market analyst from Cubic Analytics commented on the US Federal Reserve's impact on cryptocurrencies and broader assets through questionable fiscal policies.


On Anthony "Pomp" Pompliano's "Best Business Show" on June 20, Caleb Franzen, senior market analyst at Cubic Analytics, explained how the Federal Reserve controls asset prices.


When asked about the connections between a wide range of assets and the current economic environment , Franzen replied that yields and asset prices show an inverse correlation.


The crypto market and inflation

The Fed's tightening of monetary policy is causing investors to sell off assets of all kinds.


“In this environment, we could see that assets from all areas, whether stocks or bitcoin and cryptocurrencies or even government bonds, are sold off in the bond market.”


Unless there is a formal change in the yield environment, there will be no bull market, Franzen added. Financial analysts are generally convinced that the crypto market will not recover until the macroeconomic currency situation is under control.


The inflation rate is currently at 8.6% , a forty-year high. It took around 18 months for the inflation rate to reach today's catastrophic levels after surpassing the 2 percent mark. Under these conditions, despite the Fed's best efforts, it is unlikely that the currency situation will improve in the coming months.


Franzen explained that the Fed is lagging behind in this area, so a turnaround in inflation data could be a "general foreshadowing of a reversal in the monetary policy environment".

Current market conditions are comparable to the 2018 bear market . Back then, the crypto market bottomed in December when the Fed officially suspended rate hikes. This move coincided with a massive stock market crash in the same month.


A similar crash also happened in March 2020. At that time, the Fed declared that it would support the monetary and financial system indefinitely. The opposite case happened in November 2021 in the crypto market. When the Fed announced that it would reduce the money supply, the crypto market hit a new high.


“It's a super simple and rough gauge of where asset prices are headed going forward. In the monetary wonderland we find ourselves in, this benchmark is super accurate.”


Compound Capital Advisors founder and CEO Charlie Bilello spoke pompously about similar forecasts and analysis a few days earlier. The Wall Street analyst also explained that the Federal Reserve has a major impact on asset prices and market cycles. Bilello also confirmed that the Federal Reserve is lagging behind at the moment.


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