Cryptocurrency traders are preparing for a potential surprise from the Federal Reserve as the value of Bitcoin, Ethereum, and XRP experiences a sudden surge, reaching a staggering $300 billion.
Traders in Bitcoin, Ethereum, and XRP are bracing themselves for a shock from the Federal Reserve as the price of cryptocurrencies suddenly accelerates to $300 billion.
The price of bitcoin has dropped by more than ten percent since this time last week, despite the fact that the chief executive officer of JPMorgan made a surprise flip on bitcoin. The downward trend has suddenly accelerated, and it has erased three hundred billion dollars from the combined market for bitcoin, ethereum, XRP, and other cryptocurrencies since it reached its highest point of $2.8 trillion earlier this month.
Right now, as Elon Musk makes a stunning return to the cryptocurrency market, traders of bitcoin, ethereum, XRP, and other cryptocurrencies are keeping a close eye on the interest rate decision that the Federal Reserve will announce on Wednesday, which has the potential to further depress values.
Officials will revise their prediction for the next months, which currently predicts three cuts in 2024. This will take place concurrently with the Federal Reserve’s decision to retain interest rates on Wednesday, which is widely anticipated to result in the rates remaining unchanged.
On the other hand, the Federal Reserve will be obliged to maintain interest rates at a high level for a longer period of time than markets and central bankers predict, according to a poll conducted by the Financial Times among experts. In recent weeks, the cryptocurrency and stock markets have reached new highs as a result of the rising anticipation that the Federal Reserve is on the verge of declaring triumph in its battle on inflation.
The data on inflation in the United States, which were derived from the consumer price index (CPI) and the producer pricing index (PPI), both revealed price rises that were larger than anticipated last week.
In the meantime, Japan’s central bank has tightened its monetary policy by increasing interest rates for the first time since 2007. This monetary policy adjustment comes as concerns about deflation have decreased and inflation has increased.
Tristan Frizza, the chief executive officer of Zeta Markets, stated in emailed comments that the “high inflation rate in the United States could prompt the Federal Reserve and other central banks to raise interest rates, potentially slowing price rises and causing some pullback in cryptocurrency prices.”
On the other hand, the immediate impact that inflation has on consumers, which is to erode their assets, may cause them to invest more in cryptocurrency in order to compensate for these consequences. It is possible that the prevalent narrative that bitcoin and other cryptocurrencies are “immune” to inflation, in conjunction with the growing interest of the market and the involvement of institutions in cryptocurrency, could spark a greater level of participation in the cryptocurrency markets.