Economic Tremors Set Stage for Unprecedented Crypto Heights

Posted on 31/10/2023 | 767 Views

Bitcoin, Ethereum, XRP, and other leading cryptocurrencies have witnessed impressive growth and hung onto their gains posted last week, with indicators suggesting President Joe Biden might introduce some significant market movements soon.

Over the past year, the value of Bitcoin has doubled, bouncing back notably after the dramatic collapse of the major exchange, FTX. However, insiders hint that we could be on the brink of an even larger shakeup.

The renowned crypto enthusiast, Arthur Hayes, foresees a phase of "global wartime inflation" propelling Bitcoin's valuation to a staggering $1 million.

Bitcoin's anticipated halving event, forecasted to add further fuel to the crypto bull market, is imminent.

Crypto trading enthusiasts, such as Arthur Hayes, have emphasised in a detailed blog post that the burgeoning military budget of the U.S., amidst escalating tensions between Israel and Hamas, could dramatically influence the financial landscape.

He notes, "When wars skyrocket the need for funds, traditional financial reservoirs like U.S. Treasury bonds might not offer the sanctuary investors seek. In such volatile times, gold, and especially Bitcoin, may witness surges as investors grapple with fears of global wartime inflation."

In a backdrop of a jittery $25 trillion U.S. bond market, Wall Street has been on its toes, especially as the interest rates on decade-long U.S. Treasury notes surpassed 5% for the first time in over a decade and a half.

The global financial custodians, like the U.S. Federal Reserve, are wrestling to contain the rampant inflation, a consequence of the prodigious money printing during the pandemic and subsequent supply disturbances. Their aggressive measures to tame the inflation beast have led to turmoil in the crypto and stock domains over the past two years.

Hayes, sharing more of his insights, mentioned, "Once it's clear to the world the game that's being played, the crypto market will charge ahead like a bull. It may be prudent for investors to diversify from short-term U.S. Treasury bills to cryptocurrencies."

While the crypto world remains lively with Hayes's projections, the forthcoming Federal Reserve Federal Open Market Committee (FOMC) interest rate meeting is also drawing significant attention.

Yuya Hasegawa, a crypto analyst, highlighted in a communique, "The upcoming FOMC event could redefine the market dynamics. With the U.S. economy flexing its muscles, the Fed might keep its policy rate untouched. However, Jerome Powell, the Federal Reserve chair, could counteract the market's predictions about the end of rate hikes. We might see a surge in treasury yields as a result. This explains why Bitcoin's next surge might be time-bound. We could witness another hike soon, followed by a correction, or the value could plateau until the FOMC, post which it might recede."

 

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