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The rate hike is here! No more inflation?

The rate hike is here! No more inflation?

The cryptocurrency market has gone through a week of high volatility, after the great speculation about different macroeconomic events around the world continues. Meanwhile, the long-awaited meeting of the Federal Reserve took place, with a rate hike that seems to have surprised no one.

Cryptocurrencies ended a relatively positive week, after the Federal Reserve announced a hike in interest rates of 0.25 percentage points, for the first time since 2018, maintaining an important turn in the Fed’s policy, after different events such as the Covid-19 pandemic had kept the cost of money practically at zero. Said measure will seek to counteract the high levels of inflation in the United States, which reached record levels for almost 40 years. Also, it is worth mentioning that Jerome Powell, chairman of the Federal Reserve did not rule out another rate hike this year.

As for its impact on the crypto market, we saw high volatility in the crypto market, with Bitcoin hovering between $39,000 and $41,000 after such announcements were made, and ending up consolidating just above $41,000 after more than a week without reaching that price. Major altcoins, meanwhile, also reacted positively, with both the crypto market and the stock market said to have maintained a positive correlation during such events. However, the volatility in the markets is expected to continue as the Federal Reserve continues to raise interest rates and pursue other monetary policies in an attempt to reduce high levels of inflation. In other news, the acceptance of crypto assets continues around the world, after the central bank of Bahrain and the regulatory authorities of Dubai granted licenses to Binance, the largest cryptocurrency exchange in the world, to carry out operations in their territories. It should be noted that these are the first licenses that the exchange obtains within the Gulf Cooperation Council (GCC). This is undoubtedly a great step for the implementation of crypto services around the world, but nevertheless, they must be very careful, since they will be regulated with strong policies against money laundering and the financing of terrorism. Let’s talk again about Russia and Ukraine conflict, as we saw in previous weeks, countries around the world have shown their support for the Ukrainian country, after the various attacks they have suffered in recent days, generating donations in crypto. Thanks to this, the Ukrainian government has decided to legalize cryptocurrencies throughout the country, establishing the conditions that exchanges must meet in order to operate in the country, as well as everything related to regulations. Now, although interest in the metaverse and NFTs has decreased considerably in recent weeks, it has been reported that Mark Zuckerberg, CEO of Meta Platforms Inc., would be looking to implement NFTs on the Instagram platform soon, following the trend of recent months, after Twitter allowed the use of NFTs as a profile picture. While no official date has been released, it looks like this will take place anytime soon, so interest in non-fungible tokens could pick up. Bitcoin is above $42,700 making quite an interesting move. Let’s see if it manages to breach its 100 period EMA to go up near $46,000. BTC/USDT 1D (TradingView Chart). We can observe something very similar with Ethereum, since it is trading above $3,000 making a movement very similar to that of BTC, so in the same way, if it breaches its 100 period EMA, it could rise to $3,300. ETH/USDT 1D (TradingView Chart). Volatility in the financial markets seems to be increasingly prevalent, however, the adoption of cryptocurrencies in various parts of the world, in this case in major countries in the Middle East, gives us confidence about the long-term future of crypto assets. Without more to add, we wish you an amazing week.

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