Bitcoin’s price could ironically be benefitting from both a bad jobs report and pessimistic statements from the United Nations.
- Bitcoin has rallied today in spite of concerns in broader markets.
- Investors have their eyes peeled for the so-called “Fed pivot,” or a softening in the U.S. central bank’s stance on interest rates.
- The markets appear to have begun pricing in negative developments in the U.S. economy as bullish catalysts, with the idea being that harsh numbers will force the Fed to reconsider its rate hikes.
Bitcoin has posted surprising gains today. Stocks are also performing well for the second day in a row.
Despite a worrying macro landscape, Bitcoin, stocks, and other equities are enjoying gains on the week thus far.
The moves are surprising considering recent hawkishness from the Federal Reserve, which has been resolute throughout the year in its commitment to raise interest rates. Risk assets such as stocks and crypto typically suffer against such moves, but the Fed has shown little indication that it is willing to slow down.
Ironically enough, however, investors seem to be viewing signs of weakness in the American economy (for example, today’s report from the Bureau of Labor Statistics, which reveals a drop in the number of job openings—from 11.2 million to 10.1 million) as positive signs for markets. The reasoning behind such bullishness is that explicit signs of recession may force the Fed to reconsider its policies.
This hope was fueled yesterday by a plea from a United Nations agency that the Federal Reserve dramatically slow or even cease its rate increases. In a report published yesterday, the United Nations Conference on Trade and Development argued that the Fed’s aggressive rate hikes run the risk of provoking a recession, with poor countries faring the worst.
The so-called “Fed pivot” would be a welcome development for crypto investors, at least in the short term. Market watchers have worried throughout the year that the Fed’s aggressive rate hikes could tip an economy bloated by quantitative easing into a full-scale recession. Nonetheless, every indication from the Fed is that it intends to stay the course, with Chair Jerome Powell warning this August of “pain” ahead.
Bitcoin’s daily gains are coming in at a modest 3.64% at the time of writing; the bounce is nevertheless refreshing in the brutal and long-lasting bear market. Indeed, while stocks are also up today, last week’s rut in the stock market left Bitcoin mostly unaffected. This has lent some weight to the oft-cited theory that Bitcoin could one day decouple from stock performance, but the markets will need to produce much more data before any such trend can be verified.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies. The material presented in this article is for informational purposes only and should not be considered investment advice.
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
Fed Hikes Rates by Another 75 Basis Points
The latest rate hike from the Fed comes after the latest Consumer Price Index registered a higher than expected inflation rate of 8.3% in August. Fed Announces Another Rate Hike…
UN Warns Fed to Cool Rate Hikes
A UN agency is urging the Federal Reserve to slow its increases in the federal funds rate to avoid recession. “We Must Change Course” The Federal Reserve needs to pump…
Into the Night: Markets Tremble as Powell Warns of “Pain” Ahead
Federal Reserve chair Jerome Powell delivered an address this morning at the central bank’s annual Jackson Hole meeting in which he warned of tightening policies “for some time.” Risk markets…