The Crypto market falls after FED intervention. For the US Federal Reserve, inflation remains at a much too high level. This should lead to a further increase in its key rates. Following his intervention, the crypto market experienced a slight correction.
An upcoming interest rate hike
The crypto market fell following the various announcements from the FED. The latter declared that it would continue to raise its interest rates to stop galloping inflation in the United States.
The FED considers inflation still far too high despite a still strong labor market and an unemployment rate that remains low, around 3.5% as of February 2020, a 50-year low. She adds that there is no indication that inflation will subside in the coming weeks or months.
Bitcoin fell by almost 1% following this announcement and by 1.5% in 24 hours, it is currently trading around $23,450. Ethereum corrected it by almost 2.70% in 24 hours and is trading around $1850.
Slight corrections after these new announcements that the market seemed prepared to hear.
The equity market experienced a slight correction with the Dow Jones falling by 0.1%, the S&P 500 by 0.2, and the Nasdaq more strongly by 0.6%.
Remember that the FED sets its long-term inflation target at 2%, far from the more than 8.5% over one year for the month of July, which the United States is currently experiencing.
This rate is also at its highest for almost 4 decades, testifying to the exceptional nature of this soaring price.
As a reminder, the central bank has raised its key rate by a total of 225 basis points since the beginning of 2022. Market observers estimate that it could raise rates by another 75 basis points at its September meeting.
Investors have already turned away from cryptos like shares of tech giants. Add to those serial disasters in the crypto industry and you have the bear market we are currently experiencing.
These particularly risky assets are the first victims of the complicated macro-economic conditions that we have been experiencing since the beginning of the year.
A fundamental trend that remains favorable to cryptos
If the short or medium-term context remains complicated, the underlying trend remains favorable to the crypto industry. Indeed, an analysis study of Blockdata reveals the massive investments of large companies in the field of blockchain.
Among these companies that believe in the future of technology, we find the giant Alphabet, the parent company of Google. The web giant has indeed invested more than 1.5 billion dollars from September 2021 to mid-June 2022.
Among these investments are well-known companies in the sector such as Dapper Labs, the company behind NBA Top Shot, or Fireblocks, the digital asset custody platform.
Second, on this list is the largest investment fund in the world BlackRock with 1.17 billion dollars. The giant of the global economy has notably invested in the FTX exchange or the USDC Circle issuer. To complete the podium we find the bank Morgan Stanley with 1.11 billion dollars.
Just behind we have another global giant the South Korean Samsung which has invested in 13 companies including Ramper, Aleppo, and Animoca Brands for 977 million dollars.
The rest of this ranking allows us to observe a large number of banks: Citi, Wells Fargo, and Goldman Sachs. Actors who until recently declared that they did not believe in the crypto industry, sometimes even calling it a scam.
We also note the presence of payment players such as Paypal and American Express.
This new analysis highlights the increasingly massive investment of the traditional economy and Web 2.0 giants in blockchain technology.
In recent months, this trend has therefore gained momentum and allows us to maintain our optimism about the future of the crypto market. This news added to the resilience, for now, of the market are all encouraging signs for the future.
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