The post Analyst Reveals How NASDAQ’s Drop Could Shake Up the Crypto Market appeared on BitcoinEthereumNews.com.

The NASDAQ’s recent 5% drop may have triggered the cryptocurrency market’s downturn. Janet Yellen’s actions in increasing treasury bill issuance are influencing market liquidity and asset prices. The potential unwinding of Japanese carry trades could lead to significant changes in global financial markets. In a recent analysis, Arthur Hayes examines how the NASDAQ’s 5% decline might influence the cryptocurrency market in a YouTube video. Hayes attributes the recent downturn in crypto prices to the drop in the NASDAQ. Hayes points to the USD/JPY chart as a key indicator for understanding the market dynamics.  For decades, Japan showed little interest in its currency, investing heavily in risk assets abroad using borrowed yen. Recently, the Japanese government’s decision to raise interest rates has prompted investors to unwind these trades.  Hayes warns that this unwinding could potentially impact global risk assets, including Bitcoin and Ethereum. The video delves deeper into the potential consequences of this unwinding on the crypto market. Hayes explains that Japan’s actions could trigger a major reallocation of capital, affecting crypto investments. This situation creates a risk for the market, as investors may pull back from crypto assets in response to reduced liquidity and increased market instability. Besides, Hayes outlines several factors that could drive a surge in crypto investments later this year. He points out that the summer months typically see lower trading volumes due to vacations, leading to increased market volatility driven by news and events.  Hayes also anticipates that potential rate cuts by the Federal Reserve might not materialize due to ongoing economic growth and persistent inflation. Furthermore, the upcoming US Treasury quarterly refunding announcement and its implications for money printing could also influence crypto prices. Moreover, Hayes emphasizes the end of central bank dominance and quantitative easing, highlighting the US government’s stimulus spending and banks’ lending.…

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Filed under: News - @ August 7, 2024 9:18 am