the impact of the decisions of the Fed and the BCE on Bitcoin
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21Shares, the first issuer in the world of ETP on cryptocurrencies, has conducted an in-depth analysis on the consequences of the recent decisions of the Federal Reserve (Fed) and the European Central Bank (ECB) on the cryptocurrency market, with a particular focus on Bitcoin. The Fed has kept interest rates unchanged, adopting a “higher for longer” policy, while the ECB has decided on a rate cut. These decisions have triggered a series of reactions and speculations that could significantly influence the landscape of cryptocurrencies in the coming months. 21Shares: The Fed and market uncertainty in the analysis of the Bitcoin market The decision by the Fed not to cut interest rates has increased uncertainty among investors. Predicting the future moves of the Fed has become more complex, causing an increase in volatility in the financial markets, including those of cryptocurrencies. In the coming weeks or months, it is likely that we will witness more pronounced swings in cryptocurrency prices, as investors attempt to anticipate the next decisions of the Fed. This uncertainty is further fueled by the “higher for longer” policy, which suggests maintaining high interest rates for a more extended period, putting pressure on riskier assets. Despite the uncertainty and short-term volatility, Bitcoin could benefit from the tensions in the US banking system in the long term. The unrealized losses within US banks will further stress the financial system, creating a favorable environment for assets considered safe havens like Bitcoin. This phenomenon was observed in March 2023 with the collapse of Silicon Valley Bank (SVB), when Bitcoin saw an increase in value in response to the banking crisis. Another key factor that will positively influence the cryptocurrency market is the increase in liquidity. An increase in liquidity is generally seen as a positive signal by financial markets, as it…
Filed under: News - @ June 14, 2024 8:28 pm