The cryptocurrencies They operate with profits this Tuesday, March 21, awaiting the next decision to be made by the Federal Reserve (Fed) on rates. In the last week, digital currencies showed their resistance to the impact of the financial crisis unleashed in the US and Europe and they managed to be a shelter for investors just like gold. In this sense, between today and tomorrow it will be defined what will happen with the prices.
Bitcoin exceeds $28,000 and most cryptocurrencies are operating with gains of up to 11% at the hands of Ripple, after reaching $20,000 million in market capitalization. The crisis and fall of Silicon Valley Bank and Signature Bank came in handy for cryptocurrencies, but especially for Ripple, which experienced higher gains than Bitcoin and Ethereum. Cardano’s rise of up to 4% and Ethereum 2.9% also stands out.
The focus of the market now turns to the decision that the Federal Reserve will take tomorrow. However, nothing is clear so far. “The Federal Reserve should pause on Wednesday. The system has suffered several major shocks. Three US bank closures in one week that have wiped out holders of stocks and bonds. The demise of Credit Suisse and the zeroing out of its subordinated bondholders. In particular, the assumption of losses by bondholders is a new phenomenon, since they were protected in the GFC,” he said. bill ackman, founder and CEO of the hedge fund Pershing Square Capital Management, on his Twitter account.
Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, points out that investors will have to watch what the Fed does with the quantitative tightening (QT)given that does not believe the Fed will “backtrack on its balance sheet reduction strategy”or put it on pause, because crisis intervention is a short-term, tactical move”; In this sense, it should be noted that the balance has increased significantly in recent days. However, this expert points out, the “huge” balance sheet of the Federal Reserve, of 8.6 trillion dollars, “must be reduced sooner rather than later.”
“This morning, activity in Fed Funds futures is pricing in a 75% probability of a 25 basis point rise. This probability was below 50% yesterday, ”he adds.
“Assuming recent hikes hold and no further surprises, the odds remain in favor of a 25 basis point rate hike; Otherwise, the Federal Reserve risks sending the message that it is more concerned with financial stability than with fighting inflation.. A rate cut would send an even worse message that the Federal Reserve sees something the market doesn’t and could further spook already jittery markets,” said Michael Hewson, Senior Markets Analyst at CMC Markets UK.
On the other hand, the co-founder of Delphi Digital, Tom Shaughnessy, has assured in an interview with Coindesk TV that the market emits “conflicting signals”. “The data suggests that once the Fed stops raising or pivots, that is historically when markets sell off. I think the rally is due less to the Fed’s pause and more to liquidity pressures or surpluses there, ”he indicated in Bolsamanía.
Source: Ambito
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