TL;DR
-
A few months back, the market was overjoyed to learn that rates weren’t going to be hiked any further. But now, the market is worried that rates aren’t about to be lowered. Same message, different reaction.
-
More money tied up in servicing loans = less money to invest. One hope was that it’d be found in the mere potential of lowered interest rates, sometime within the next 6-12 months – but the Fed is staying painfully tight lipped.
-
Moral of the story: if the ETF news doesn’t progress, we might be waiting a while for the next crypto market price pump.
Full Story
Perception is a funny thing.
If it was 110f degrees (43c) outside and we told you:
“Good news, it’s not going to get any hotter than this!”
You might feel relief…but if we told you:
“It’s not about to get any cooler – in fact, the temperature is going to stay at this level for a good while yet.”
It’d probably only add to your stress levels.
Weird thing is: we’d essentially be delivering the same message.
There’s a similar trick of perception playing out with the market’s reaction to Federal Reserve interest rate hikes.
A few months back, the market was overjoyed to learn that rates weren’t going to be hiked any further. But now, the market is worried that rates aren’t about to be lowered.
Same message, different reaction.
Ok, so what does this have to do with crypto?
Well, all markets need new money injected into them in order for prices to go up.
Interest rates are the highest they’ve been in over a decade right now, which means the investing public is spending more on loan repayments than it has in loooong while.
More money tied up in servicing loans = less money to invest.
The rumors of a spot Bitcoin ETF (aka a way to trade BTC on the stock market) pushed Bitcoin’s market cap way up over the past week…
But as those rumors begin to stagnate, the market is now looking for new sources of information that imply ‘a fresh injection of cash is imminent!’.
One hope was that it’d be found in the mere potential of lowered interest rates, sometime within the next 6-12 months – but the Fed is staying painfully tight lipped.
Moral of the story: if the ETF news doesn’t progress, we might be waiting a while for the next crypto market price pump.
