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Bitcoin Could Tank To $15K; Experts; Experts Believe Fed Actions Will Be Beneficial In the Long Run.

Manoj Nair




Bitcoin and Ethereum values have stagnated and tanked for the last few days. BTC values have tanked by 6% in the past week. It is currently trading at $20,309.17, up by 2.13%. Ethereum prices have also tanked by more than 3% in the past seven days and are presently trading at $1,633.30, up 5.89%.

The latest round of tanking of the values of cryptocurrencies has been precipitated by the hawkish statements by the Fed Chair, Jerome Powell. In a chilling message, Powell warned of more pain for the households and businesses. The cost of soaring inflation, the highest in 40 years, will be increased interest rates. A negative job report can cause the BTC values to plummet and reach $15K.

Major cryptocurrency influencer Benjamin Cowen has warned that the Fed is dead sure not to print money anytime soon to cushion the risks of the asset markets anytime soon. The Fed is more into controlling inflation and will do everything to bring it under control.

Federal Reserve Effect On Bitcoin

The crypto sector is intricately related to the Federal Reserve policy and has a considerable role in the price movement. Since 2020, the crypto sector has been intimately associated with the stock exchange, and stock exchange sentiments also impact the crypto market. The Crypto sector behaves just like tech stocks and is tightly linked to the tech-oriented NASDAQ. Therefore, macroeconomic factors play a massive role in crypto prices.

BTC prices were negatively affected by first the Consumer Price Index and then the Personal Consumption Expenditure, which highlighted cooling inflation. The crypto sector went upbeat and rallied. However, the rally was dampened by the news that Federal Reserve is contemplating hawkish measures like a rise in interest rates by 100bps. Traditionally dovish Fed officials, like Minneapolis Fed’s Neel Kashkari, took an aggressive stance against inflation.

All eyes are now on the next FOMC meeting, where it will be decided what will be the quantum of an interest rate increase. Most experts predict a 75% bps rise and, in a worst-case scenario, a 100%bps increase. Cowen added that the crypto consumers must wait for the Fed actions to sink in, which will be more beneficial In the long run.

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