What's Hot

    Alternative Media Attacks Bitcoin: A Response To “Bitcoin Cannot Free Palestine”

    July 27, 2022

    Bullish Sentiment Spills Over To Institutional Investors As Ethereum Inflows Balloons

    July 27, 2022

    Wanchain AMA with Marketing Director Temujin Louie

    July 27, 2022
    Facebook Twitter Instagram
    • Altcoins
    • Bitcoin
    • Ethereum
    • Blockchain
    Facebook Twitter Instagram
    Guide to Crypto and Altcoins
    • Bitcoin

      Alternative Media Attacks Bitcoin: A Response To “Bitcoin Cannot Free Palestine”

      July 27, 2022

      Crypto Traders Split on Upcoming Fed Rate Hike’s Impact on Bitcoin

      July 27, 2022

      Bitcoin holds $21k – crypto rally still on

      July 27, 2022

      TA: Bitcoin Price Consolidates, Why Recovery Could Be Capped

      July 27, 2022

      Bitcoin Is Global Money For An Interconnected World

      July 27, 2022
    • Altcoins

      Wanchain AMA with Marketing Director Temujin Louie

      July 27, 2022

      ‘Game yet to begin’ for security token offerings, INX exec says

      July 27, 2022

      CryptoDep’s Top 5 Meme Tokens by Social Activity

      July 27, 2022

      Large Uniswap Holders Awaken, Accumulate Nearly $75,000,000 in UNI in About Two Weeks: Analytics Firm Santiment

      July 27, 2022

      Shiba Inu (SHIB) Burn Rate Continues 200% Rally Following Crypto Card Release

      July 26, 2022
    • Ethereum

      Bullish Sentiment Spills Over To Institutional Investors As Ethereum Inflows Balloons

      July 27, 2022

      Technical Analysis – Ethereum Price (ETH/USD) – 27/07/22

      July 27, 2022

      Massive Ethereum Supply Shock Incoming As ETH Prepares To Outpace Bitcoin: Raoul Pal

      July 26, 2022

      “Crypto King” Barry Silbert Hyping Up Ethereum’s Merge Upgrade

      July 26, 2022

      Institutional ETH sentiment turns positive after 11 weeks of outflows

      July 26, 2022
    • DeFi

      DeFi.org Announces Four Leading Participants in Its Polygon-Led Accelerator Program

      July 26, 2022

      DeFi Tokens Lido, Curve Follow Ethereum into Bear Territory

      July 26, 2022

      DeFi Total Value Locked (TVL) Soars By More Than $10 Billion

      July 26, 2022

      This little-known DeFi crypto token has rallied over 800% in a month

      July 26, 2022

      Solana said to be ‘more decentralized than people think,’ but there’s more

      July 26, 2022
    • NFT

      NFT potential vast and creative possibility endless, says YellowHeart CEO

      July 27, 2022

      A Complete Guide To Altcoins

      July 27, 2022

      Erick Calderon: NFT Platform Art Blocks’ Rapid Growth ‘Felt Unreasonable’

      July 26, 2022

      NFT Market Projected to Reach $200 Billion in 2030

      July 26, 2022

      The Sandbox Creating a Virtual Home & NFT Art for Alec Monopoly

      July 26, 2022
    • Mining

      The Top 5 Best Cryptocurrencies for Mining in 2022

      July 26, 2022

      Bitmain Partner Antalpha Unveils a Host of Needed Lending Products for Miners

      July 26, 2022

      AntPool Supports Ethereum Classic Ecosystem With $10M Investment

      July 26, 2022

      Texas a Bitcoin ‘hot spot’ even as heat waves affect crypto miners

      July 26, 2022

      Bitcoin mining to harness onsite natural gas emissions: Ark Invest

      July 26, 2022
    • Metaverse

      The Sandbox primary LAND sales volume fell 80% in Q2

      July 26, 2022

      HTC partners with Japan’s pixiv to launch 3D anime avatars in the metaverse

      July 26, 2022

      Wharton School launches metaverse-focused business course

      July 26, 2022

      Aftermath Islands Metaverse Limited Secures $25M Commitment from LDA Capital

      July 26, 2022

      Patents and Big Tech: Which Companies Will Rule the Metaverse?

      July 26, 2022
    • More…
      • Blockchain
      • Analytics
      • Exchange
      • Legal
      • Finance
      • Security
      • Other
    Guide to Crypto and Altcoins
    Home » Crypto Traders Split on Upcoming Fed Rate Hike’s Impact on Bitcoin
    Bitcoin

    Crypto Traders Split on Upcoming Fed Rate Hike’s Impact on Bitcoin

    🌐  www.coindesk.comJuly 27, 2022No Comments4 Mins Read
    Share
    Facebook Twitter LinkedIn Pinterest Email

    The U.S. Federal Reserve (Fed) will likely raise the benchmark borrowing cost by 75 basis points (0.75%) on Wednesday in a continued effort to drain liquidity to tamp down inflation. Crypto traders are split on how bitcoin (BTC) would react to the rate hike.

    Griffin Ardern, a volatility trader at crypto asset management firm Blofin, foresees a bitcoin price drop after the Fed lifts rates by 75 basis points (bps) to the 2.25%-2.5% window.

    “Considering that the overall risk level of the crypto market has not returned to a reasonable level, it is very likely that the BTC price will drop by more than 10% after the Fed rate hike,” Ardern said.

    The Fed’s liquidity-sucking measures, such as rate hikes and balance sheet runoffs, have roiled asset markets in the past few months. Bitcoin has declined by over 50% since the central bank kicked off the tightening cycle in March.

    “Bitcoin and the broader crypto market may see another relief rally following the 75 basis point rate hike after which we expect markets to trade sideways, while ether (ETH) may outperform in anticipation of the merge,” according to Dick Lo, founder and CEO of quant-driven trading firm TDX Strategie.

    Perhaps traditional and crypto markets have priced in the impending 75 basis points hike, with Fed officials hinting at such a move in recent weeks.

    Bitcoin has dropped by 7% in the week leading up to Wednesday’s Fed event. “We are seeing participants taking a risk-off approach ahead of the FOMC decision as expected,” Lo responded when asked about the pre-Fed flows in the crypto market.

    At press time, the Fed fund futures, derivatives based on the benchmark interest rate, put the likelihood of a 75 bps move at 75%, alongside a 25% probability of a 100 bps hike.

    Trader and analyst Alex Kruger said the crypto market could see a small rally following a 75 bps rate rise but warned of a decline should the central bank surprise with a 100 basis point move. However, Fed officials had pushed back against a full percentage point hike earlier this month.

    Beyond rate hikes

    The focus will be on how worried policymakers are about unemployment risks and the looming recession in Europe.

    The market has convinced itself that inflation has peaked and the Fed will go for slower rate hikes after July, eventually cutting rate next year. That seems to be evident from the 28 bps drop in the 10-year Treasury yield in the past seven days. At press time, the yield stood near 2.8%.

    Read: Rate Hike at Fed’s July Meeting Provides a Credibility Test, With Cuts Already on Horizon

    Risk assets, like bitcoin, could rally if the Fed’s policy statement or chairman Jerome Powell sound increasingly concerned about recession risks, bolstering market expectations for a policy pivot (from tightening to easing) in 2023.

    However, observers expect the Fed to retain its single-minded focus on controlling inflation while downplaying recession fears.

    “There is no doubt that Powell will pivot, but the pivot will not be this year, at least until November, and there will be no significant reduction in rate hikes (like 25 bps). The reason is that the Biden administration needs the Fed to join them in expressing its determination and confidence to fight inflation to win the midterm elections in November,” Blofin’s Ardern told CoinDesk.

    According to Jon Turek, author of the Cheap Convexity blog, the Fed is likely to stick to June script.

    “We are in this time inconsistency state where the Fed is reacting to June CPI and the market is trading the European recession. The Fed will side with June CPI and I think to more of a degree than risk assets are suggesting right now,” Turek said in a Fed preview published Tuesday.

    Read: Bitcoin Drops Even as Wall Street’s ‘Fear Gauge’ Indicates Calm Ahead of Fed Decision

    Source: www.coindesk.com
    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    bitwiza
    • Website

    Related Posts

    Alternative Media Attacks Bitcoin: A Response To “Bitcoin Cannot Free Palestine”

    July 27, 2022

    Bitcoin holds $21k – crypto rally still on

    July 27, 2022

    TA: Bitcoin Price Consolidates, Why Recovery Could Be Capped

    July 27, 2022

    Bitcoin Is Global Money For An Interconnected World

    July 27, 2022
    Add A Comment

    Comments are closed.

    Top Posts

    Open Interest In Ethereum Futures Has Hit a Record High

    February 13, 2022

    Number of SHIB holders surges more than 30% in a month

    November 12, 2021

    Estimating This Cycle’s Bitcoin Price Top

    November 12, 2021

    Subscribe to Updates

    Get the latest crypto news from bitwiza.com about altcoins, cryptocurrencies and blockchain.

    Sponsored
    UNITED NEKO ALLIANCE

    We are the leader in cryptocurrency news and a top knowledgebase for crypto assets, DeFi and blockchain.

    We're a community. Connect with us:

    Facebook Twitter Instagram Pinterest YouTube
    Top Insights

    Open Interest In Ethereum Futures Has Hit a Record High

    February 13, 2022

    Number of SHIB holders surges more than 30% in a month

    November 12, 2021

    Estimating This Cycle’s Bitcoin Price Top

    November 12, 2021
    Get Informed

    Subscribe to Updates

    Get the latest creative news from Bitwiza about altcoins, cryptocurrencies and blockchain.

    Facebook Twitter Instagram Pinterest
    • Altcoins
    • Blockchain
    • Bitcoin
    • DeFi
    • Ethereum
    • Crypto Mining
    • NFT
    • Security
    © 2023 Bitwiza. All Rights Reserved.

    Type above and press Enter to search. Press Esc to cancel.