It appears bitcoin and crypto traders are doing their best to ignore any upcoming rate hikes set to be instituted by the Fed and that they are working hard to get past all the damage that’s already been done to the industry.
The Fed Has Hurt BTC
The Federal Reserve (Fed) has been on a roll as of late. That roll has involved hiking rates as a means of fighting inflation, which has been running rampant under failing commander-in-chief Joe Biden. However, it has come to traders’ attention that the efforts induced by the Fed have not done much to curb incoming inflation, and all that’s really happened is the digital currency space is suffering like it never has before.
Jon Turek – author of the “Cheap Convexity” blog – explained in a recent statement:
The theme for tomorrow to me is not about a 75 [basis point hike] or 100, even though I am in the 75 camps. The theme for [Wednesday] is that the Fed thought the economic weakness we saw in Q2 was going to assist them in getting inflation back to target and they no longer have confidence… The hawkish risk for tomorrow is that [Jerome Powell] now thinks we are still [rather] early on.
The bitcoin price has been enduring some of its harshest bear conditions in history. As the world’s number one digital currency by market cap, BTC has fallen from its recent all-time high of approximately $68,000 per unit and is now trading for more than 70 percent less, struggling to maintain a position just in the $19K range. It’s an ugly and sad sight to see.
Josh Olszewicz – head of research at digital asset manager Valkyrie Investments – explained in an interview:
The Fed will probably raise rates 75 basis points this week while issuing forward guidance on raising rates at a smaller clip for November and December meetings, likely at 50 bps each. Next year we should see a few 25 bps hikes. This isn’t a change in direction from Fed tightening. This is more to say that they are beating inflation but not quite done yet, as midterm elections are coming.
Are Things Still Hawkish?
Brad McMillan – chief investment officer and managing partner at Commonwealth Financial Network – also threw his two cents into the mix, commenting:
Expectations are very hawkish, and the Fed can come out just as expected and still be more dovish than expected. That limits the market downside from this meeting and just may provide some upside going forward… There are signs that inflation may be peaking as high-frequency housing data is softening. The real question for this Fed meeting is whether it notices – and chooses to acknowledge – those trends. If so, that would likely be interpreted as a surprise on the dovish side in its comments.
Source: https://www.livebitcoinnews.com/bitcoin-traders-are-trying-to-ignore-the-fed/