The crypto sector is smiling, and many factors contribute to this sudden rise in fortunes. The macroeconomic climate has become favorable, and BTC and ETH have started their path to recovery. Altcoins are also surging and many wonder if it signals the end of crypto winter.
According to Arthur Hayes, the co-founder of BitMEX, the surprise rally of the cryptocurrency sector has been precipitated by the U.S. Treasury supplying the market with short-term treasury bills to pre-empt any shortage.
Why is the Crypto Sector Booming?
As the U.S. Treasury is filling the market with short-term treasury bills to combat the shortage, crypto prices are rising, buoyed by improved and favorable economic conditions. Also, the Dollar has slightly weakened, as shown by the dollar index, which has a positive effect on the crypto sector. The last five days have seen the DYX falling by 1.77%. The crypto sector rallied in this period.
Michael van de Poppe, the CEO of Eight Global and a significant market expert, feels that the U.S. Treasury yields are tanking. The strengthening Dollar hurt many other currencies globally, The Cryptocurrencies also faced the brunt of an ever-strengthening Dollar, and their values tanked. There were talks in the financial capitals about the possibility of global instability caused by a strengthening Dollar.
The events in the U.K. also positively impacted cryptocurrency values. With Rishi Sunak at the helm of affairs in the U.K., the crypto sector cheered as it found one of its most prominent advocates in a position of power.
Sunak is known for his pro-crypto beliefs and wanted the U.K. to become the hub of crypto activities.
What Can Become A Spanner In The Crypto Rally
The crypto sector is anxiously waiting for the next interest rate decision, which the Fed will take after the meeting on 2 November. Several tech companies will also show their third quarter report card; a bad earning report can also result in a crypto slide.