How does a stock’s price-to-earnings ratio relate to cryptocurrencies?

The show Macro Markets, hosted by Marcel Pechman, which airs every Friday at 12 pm ET on the Cointelegraph Markets & Research YouTube channel, explains complex concepts in layman’s terms and focuses on the cause and effect of traditional financial events on day-to-day crypto activity.

In today’s episode, crypto analyst Pechman looks at the price-to-earnings ratio (P/E), which is the main way stocks are valued and how it relates to cryptocurrency markets. For example, one should try to avoid times when the P/E expectations stay the same or are going down.

Viewers will learn how the ups and downs of the S&P 500 P/E are like the peaks and valleys of cryptocurrencies and why this indicator can go down even if the stock market stays the same.

The episode goes on to explain why a crypto trader should care about the $8.3-trillion balance sheet of the United States Federal Reserve. People who used this sign to buy Bitcoin (BTC) paid an average of $8,300, but just six months later, the price had risen to $14,000.

Pechman explains why the Fed adds to or takes away from its reserves, which are mostly made up of U.S. dollars, government bonds, gold and foreign currencies. Then it talks about how the market tends to pay too much attention to decisions about interest rates.

To close the Macro Markets show, there is a quick review of how to use the P/E estimate and the Fed balance sheet data to trade crypto in a simple, non-technical way.

If you are looking for exclusive and valuable content provided by leading crypto analysts and experts, make sure to subscribe to the Cointelegraph Markets & Research YouTube channel. Join us at Macro Markets every Friday at 12:00 pm ET.