Bitcoin And Crypto Now Braced For An Epic Fed U‑Turn After $200 Billion Ethereum, BNB, XRP, Cardano, Dogecoin, Polygon And Solana Price Boom

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Bit­coin
BTC
, ethereum and oth­er major cryp­tocur­ren­cies have seen a $200 bil­lion boom in the last two weeks—trig­ger­ing a shock bit­coin price price pre­dic­tion.

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The bit­coin price has come with­in touch­ing dis­tance of $28,000 per bit­coin, its high­est since last sum­mer. The bit­coin price ral­ly has also boost­ed the ethereum price and oth­er top ten cryp­tocur­ren­cies BNB
BNB
, XRP
XRP
, car­dano, doge­coin, poly­gon, and solana.

Now, after almost 200 U.S. banks were found to be deal­ing with sim­i­lar pres­sures as the col­lapsed Sil­i­con Val­ley Bank (SVB
VB
), the U.S. Fed­er­al Reserve is under pres­sure to ease back on its infla­tion-bust­ing inter­est rate hike program—something that could push the bit­coin price and cryp­to mar­ket even higher.

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MORE FROM FORBES’Go­ing Rogue’-Major Cryp­to Investor Issues Seri­ous SEC Warn­ing After Wild Bit­coin And Ethereum Price Swings

“As if they did not have enough with which to con­tend in the face of fight­ing infla­tion on one hand and fend­ing off reces­sion on the oth­er, cen­tral banks must now con­front the fail­ure of SVB and any wider impli­ca­tions that has for the bank­ing sys­tem, giv­en that high­er inter­est rates have played some role in putting the squeeze on that bank’s cus­tomers and then ulti­mate­ly the bank itself,” Russ Mould, invest­ment direc­tor at bro­ker­age AJ Bell said in emailed comments.

“We will find out just how per­turbed offi­cials are—if indeed they are per­turbed at all.”

Traders now expect the Fed to hike inter­est rates by just a quar­ter of a per­cent­age point next week before rapid­ly revers­ing course and cut­ting rates lat­er this year.

The shock col­lapse of SVB last week, as well as the clo­sure of cryp­to-friend­ly Sig­na­ture Bank, sparked fears oth­er banks could suf­fer a sim­i­lar fate. Econ­o­mists wrote in a study out this week that 186 banks across the coun­try could be prone to sim­i­lar risks as SVB. Trou­bled First Repub­lic Bank was extend­ed a life­line by almost a dozen of its larg­er rivals in order to avert its implosion.

The bit­coin price has fall­en sharply over the last year as the Fed ramped up inter­est rates at a his­toric pace to dri­ve down soar­ing inflation—wiping around $2 tril­lion from the com­bined price of ethereum, BNB, XRP, car­dano, doge­coin, poly­gon, solana.

The Fed’s response to the SVB-led bank­ing cri­sis has caused expec­ta­tions to surge the Fed is poised to reverse course and has already restart­ed quan­ti­ta­tive eas­ing—some­thing some fear could trig­ger U.S. dol­lar hyper­in­fla­tion and ulti­mate­ly the col­lapse of the entire finan­cial sys­tem.

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MORE FROM FORBES’Dev­as­tat­ing Investor Carnage’-Ex-SEC Off­i­cal Issues ‘Inevitable’ Cryp­to Bank Run Pre­dic­tion After Huge Bit­coin And Ethereum Price Crash

“Con­cerns stem­ming from a series of U.S. bank clo­sures have sub­sided thanks to the Fed’s aid and now, with their bal­ance sheet expand­ed about $300 bil­lion in a week, the mar­ket is wel­com­ing an effec­tive end to the Fed’s quan­ti­ta­tive tight­en­ing,” Yuya Hasegawa, cryp­to mar­ket ana­lyst at Tokyo-based Bit­bank, wrote in an emailed note—pointing to bit­coin’s lat­est ral­ly as poten­tial­ly sig­nal­ing the begin­ning of a new bull market.

“Although yields on trea­sury bonds have rebound­ed due to decreas­ing con­certs for the econ­o­my, which leaves some room for the Fed to con­tin­ue hik­ing rates. How­ev­er, the rever­sal in the stock mar­ket sen­ti­ment has improved risk appetite, and it could boost the price of bit­coin fur­ther in the short term.”

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