In the ever-changing cryptocurrency landscape, the coming months will see a pivotal phase. Because with global central bank monetary policies changing and inflation rising, it is more important than ever to understand the impact of these factors on the crypto markets. Let’s take an in-depth look at what to expect.
Impending shift from restrictive to accommodative monetary policy
One of the most important indicators for global economic development is the monetary policy of the central banks and in particular the US FED (Federal Reserve). In this context, investors pay attention to whether more liquidity flows into the markets in the form of money.
Because this has a beneficial effect on economic growth, increases investor optimism and, in turn, also caused inflation, which increases the prices of assets such as technology stocks and cryptocurrencies – provided that it is not too high and interest rate cuts are feared.
In this context, the economy in cycles, which have a more beneficial or hindering effect on the economy and thus also on cryptocurrencies. These usually last for a long time, so if a early positioning with good timing, above-average returns are possible. Because it can be benefited from the new cycle and the associated trend in the longer term.
Therefore, investors are now paying more attention to the market and the various economic indicators. Because these give the first indications of further development. Therefore, some of the latest changes in the most important economic indicators and factors are presented below and what they currently tell us about the possible interest rate hike by the US Federal Reserve.
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Hope for a debt deal in the US
Last week it was announced that a US debt deal was imminent. However, there was already a comparable wording in the previous week. Hence this became News also previously priced in by optimistic investors.
In addition, if there is an agreement between Biden and McCarthy, the Freedom Caucus agree. This is the conservative wing of the Republicans, heavily influenced by Trump, who doesn’t want a deal. So it is expect uncertainty.
However, a deal will probably come about, since the USA would otherwise be insolvent. It is nevertheless assumed that it boils down to the fact that the United States of America can spend less money. If, on the other hand, no agreement is reached, the USA would already be there bankruptcy on June 5th and the rating agencies would already downgrade on June 15th.
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Inflation rate is again increasing faster than expected
One of the most important indicators for the FED is the PCE inflation rate. Recently, however, this has again turned out to be higher than expected in all areas. It was 0.4% higher in a month-on-month comparison and 4.4% higher in a year-on-year comparison. In addition, the service sector could drive inflation even further.
That’s why the FED fund futures point to one again higher probability of a rate hike in June and July there. In addition terminal rate expectations also rosewhich represents the expected peak interest rate in the US.
Previously, there was still the assumption that interest rates would be lowered as early as July. However, this date has now moved into September for the time being due to the FED fund futures, with a Rate hike likely 64.2% in June and 27% in July is. This fact is new was, however, the trigger for the past rally. On the other hand, bond markets have lowered the probability of a default.
But also a rate cut does not automatically mean an immediate rally. According to statistics, this even takes an average of 6 months after the first interest rate cut, but it can also happen earlier.
One But raising interest rates is poison for technology companies, because it strengthens the US dollar and increases US Treasury yields. Still belonged at the past Tech stocks among the biggest gainers on Friday. Also the falling VIX suggests rising optimism among investors.
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Impact on the crypto market
Rate hikes can prompt investors to flee to “safe havens”.although cryptocurrencies have recently played less of this role due to the increase in correlation with the financial markets.
On the other hand, if interest rates remain low, interest in riskier assets such as cryptocurrencies could increase. Therefore, which path central banks take will have a significant impact on crypto markets.
Inflation is every saver’s and investor’s nightmare. With the current rate of inflation rising worryingly in many countries, investors are looking for ways to protect their wealth. While could Cryptos also serve as inflation hedges. Then many Cryptocurrencies like Bitcoin have had a much more profitable development since their introduction than inflationary fiat currencies like the euro.
With all these aspects it is clear that the crucial for the crypto world in the coming months could be. It remains only to carefully monitor the developments on the financial markets and draw the right conclusions. The crypto world is looking forward to the coming months. It’s time to stay alert!
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New cheap cryptocurrencies are taking investors by storm
The cheapest entry options for successful cryptocurrencies are usually pre-sales. Because in this context, the tokens are often associated with a Discount sold. In addition, investors can also secure book profits via the associated price increases as well as from one temporary safe haven benefit. In the following you will find a selection of the presales, which were able to inspire many investors after a short time:
Wall Street Memes – Personalized token of the memecoin movement
With the vision of democratizing the financial markets is Wall Street Bets and through these also the NFT Collection Wall Street Bulls and the large community that grew around it. This is also the reason why the NFT collection already sold out in 32 minutes and grossed $2.5 million. There is also a new one from the experienced team Bitcoin Ordinals NFT Collection. A new memecoin with a particularly democratic ethos has now been developed for the community. He represents the vision of memecoins as the best, which is why many are already talking about the king of memecoins. Therefore, in the presale after two days already $800,000 be recruited.
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DeeLance – Revolution for the business world through decentralization and metaverse
This is a particularly unusual project decentralized business ecosystem by DeeLance. It breaks down into a few core elements, of which the work metaverse is an essential part. In this, the users of Job interviews, teamwork, 3D presentations, interactive training, trade fairs and more benefit. Likewise can despite the great distance connectedness and efficiency of real companies be made possible. Another important element of DeeLance is the decentralized labor market with the lowest fees and highest efficiency. In addition, thanks to the Blockchain, DeeLance offers the required transparency and securitythis being over most advanced NFTs is guaranteed. These can also be used for Fragment real estate and more.
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Ecoterra – Protect and earn money through an innovative business model
Ecoterra has had one of the most impressive presales in the crypto market this year, with Selling coins for sometimes more than 1 million US dollars per day. Because that innovative and revolutionary business model of the award-winning ESG coin offers the urgently needed Incentives for recycling about the Recycle-to-earn processwhere consumers cryptocurrencies for their household waste receive. So through that urban mining to make a gold mine out of the gold of the cities. This way can achieves a sustainable return by solving the climate, environmental and waste problems become. It also includes a Climate impact profile and marketplaces for recyclable materials and CO₂ certificates.
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About the author: Simon Feldhusen first came into contact with the stock market 17 years ago and has been dealing intensively with trading, cryptoassets, stocks, P2P, corporate finance, finance and entrepreneurship on a daily basis for more than 8 years. He has also been working as a copywriter and ghostwriter in the financial sector for several years. During this time he has acquired a diversified knowledge through various training courses on the financial markets and following the daily news. Since then, not a day has gone by that he hasn’t engaged with the markets. He publishes for Finanzen.net, ETF-Nachrichten.de, Coincierge.de and P2E News.com.
