The crypto market, as we have seen for weeks, is characterized by the familiar red. After two long days of deliberation, Jerome Powell, the great man at the US Central Bank (FED), addressed the country through a press conference.
Bitcoin does its story.
That press conference started at half past 9 (Dutch time). You didn't have to watch the press conference. The Bitcoin rate already indicated enough at which point in time Powell would speak. Yesterday, bitcoin was still beautiful in green, until the press conference got closer. In the run-up to the news, it was sold, and during the news was also sold.
Interest rates rise in March?
So, the declines in the crypto market appear to be caused by the latest announcement by the US Federal Reserve. Last night, it was confirmed that interest rates will go up in March. That means borrowing money will be more expensive and the speed at which new money ends up in the economy and the financial world will decrease.
Whether this is good or bad news, let's get in the middle for now.
The FED had to do something, inflation just keeps rising. Bankers will say that this is due to problems in the supply chain, for example, but basically everything will be more expensive (and our money is worth less) if more money is added.
The highest inflation?
Inflation is currently at its peak in four decades and is 7% above the 2% target of the FED in America. This can be harmful to consumers.
Jerome Pawell said that “raising the benchmark interest rate, which has been set to zero since March 2O2O, will help prevent high prices from becoming anchored”.
The responses that follow are; Minners says the FED wants the impossible; fight inflation without affecting the market.
Powell remained quiet on the surface and left quite a few important details. What will interest be, to what extent will it increase? That's why Gary Black of The Future Fund says we have to wait and see if this is Bullish or Bearish.
Stocks in the market also deliver in.
Almost all shares fell yesterday during the press conference. Below the price of the S&P500, an index of the 500 largest companies. There must be a reason why bitcoin was born just around 2008. The financial crisis was plaguing the whole world and Satoshi Nakamoto finished with puppets turning the buttons and defining the monetary system for us.
So the bitcoin was created for the turbulent period ahead. Or as Bane says; ? in Dark Knight Rises: Ah you think darkness in your ally? You merely adopted the dark. I was born in it, molded by it. I didn't see the light until i was already a man, by then it was nothing to me but blinding. ?
