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Crypto Sector Staring At Another Crypto Crash In November As Fed Hikes Interest Rates

Manoj Nair



Crypto Crash

The crypto sector is staring at another crypto crash in November as the Fed Reserve is almost sure to raise the interest by 75 bps or even more. Bitcoin (BTC) is already showing the initial signs of a crypto crash.

All eyes are now on the Federal Reserve Meeting to be held on November 1 and 2. The Fed is going to discuss hiking the interest rate again. The previous attempts by the Fed to control the soaring inflation have been unsuccessful. The inflation rate has reached its highest in the past 30 years. Therefore, the Fed Reserve will be looking to curb inflation by increasing the interest rate. In all probability, it will be A 75 BPS hike. However, hawkish members of the Fed could bat for a 100 BPS interest hike, which could be deemed a death blow for the crypto sector.

December Hike Impending And Also A Crypto Crash

Inflation depends on spending activity, and Federal Reserve officials want to make borrowing expensive. As per the Wall Street Journal, the officials want to push borrowing costs dearer and lower asset prices. It is a method to cool down an overheated economic system by curbing spending, hiring, and investment. In a way, the officials desire to reduce demand and thus lower inflation.

The hawkish policy of the Fed was quite evident in its statements on various occasions. It seems that the Fed officials plan to continue the interest hike even in December.

Coming to the crypto sector, the crypto market will react negatively to an interest hike by the Fed Reserve, and an easing of interest rates can be hoped for only in early 2023. In the last few months, Bitcoin (BTC) prices have stagnated at the $19K-$20K band, and experts believe this sentiment will continue through the crypto market if the inflation keeps soaring and a crypto crash is a foregone conclusion.

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