Ouyi Research Institute: Global hawks central bank interest rate hike is imminently drawing salary from the bottom of Bitcoin or rising against the trend

The first week of February 2022 has not been quiet.

On February 4, European Central Bank President Christine Lagarde no longer ruled out the possibility of raising interest rates this year, moving closer to the policy tightening stance of global central banks. Officials privately expect policy guidance to be adjusted as early as next month.

Just minutes before the ECB’s policy decision, the Bank of England has already raised its benchmark interest rate by 25 basis points to 0.5%, less than two months since the last hike of 15 basis points.

In fact, inflation in major countries and regions around the world is so fast that it has to put the brakes on : the euro zone’s consumer price index (CPI) rose 5.1% in January, beating economists’ expectations and the largest increase in at least two decades. More than double the 2% target; the UK CPI in November and December hit a 10-year high and a historical high of 5.4%, respectively, the fastest growth rate in 30 years; the United States set a 39-year record with an inflation rate of 7% .

Crypto assets

Two-year bond yields have risen sharply this year as central banks take hawkish stance, data from Bloomberg

As early as December 15, 2021, the Federal Reserve announced that it would reduce monthly purchases of U.S. Treasuries and mortgage-backed securities (MBS) by $30 billion (the original plan was to reduce the monthly reduction of $15 billion), the rate is the previous Twice this, the asset purchase program is expected to end early next year rather than mid-year. And it expects to raise interest rates three times in 2022 to control the pace of inflation.

All tried to hit the brakes, with less than satisfactory results.

After successive waves of interest rate hikes, U.S. stocks have fallen sharply, with the S&P 500 falling 11% from high to low in 14 days. Goldman Sachs directly warned the Fed for the first time that if the tightening policy caused a “hard landing” of the economy, the United States may face a recession.

Crypto assets

S&P 500 plunges 11% in 14 days

The Bank of Canada, which is trying to curb inflation-induced high house prices, unexpectedly announced that it will not raise its benchmark interest rate for the time being. The reason remains the high-sounding “economic uncertainty due to a new wave of the virus,” but Canada’s federal banking regulator has previously warned that a rate hike could cause house prices to plummet by more than 20 per cent.

BlackRock, the world’s largest asset management company, directly asserted that the global interest rate hike will be loud and rainy: “We believe that although the central banks of various countries have tough words, they will eventually admit that by raising interest rates sharply to fight inflation, it will bring economic growth. Excessive price. That’s why we think the ultimate policy response will be modest.”

The headwinds to a global central bank’s policy shift have proven far more difficult than investors had expected.

On the other hand, the crypto asset market has seen a first fall and then a rise around the Spring Festival this year. The price of Bitcoin has hit $45,000 after 5 consecutive days of gains, and Ethereum is back at $3,200.

Crypto assets

Bitcoin price is approaching the $45,000 mark again after falling below $33,000, data from Ouyi

The phenomenon that cryptoasset markets are “independent” from monetary financial markets is not unnoticed. On February 8, the U.S. SEC asked the public for feedback on whether Bitcoin ETFs and Bitcoin itself are vulnerable to manipulation and fraud.

In fact, although the interest rate hike policies of major central banks around the world have had an impact on the crypto asset market, there is still considerable resistance to a resolute and substantial policy shift.

At present, according to the market, the value potential of Bitcoin is far from reaching the critical point, and the bullish trend is beyond doubt.

After the weather changes, the choice of the track will become the key.

According to public data from the media, more than $800 million in venture capital has poured into the cryptocurrency space in the past week.

Facts show that after the market bottomed, the cryptocurrency has ushered in a new round of bottom-hunting to bring upward momentum. The decline in the market also brought new opportunities for entry, and more funds and users took advantage of this opportunity to enter the cryptocurrency market. The Glassnode chain reported last week that the number of non-zero wallets reached an all-time high, unaffected by the previous decline.

Crypto assets

The number of Bitcoin non-zero wallets has reached a new high, data source: Glassnode

Sooner or later, the era of dollar-led monetary easing will come to an end. At that time, the flow of funds may bring about a reshuffle, and there will be a time for the re-selection of the track.

Careful selection and decisive decision-making are always the most important weapons for investors.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/ouyi-research-institute-global-hawks-central-bank-interest-rate-hike-is-imminently-drawing-salary-from-the-bottom-of-bitcoin-or-rising-against-the-trend/
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