The global market revolves around events such as interest rate decisions, monetary policy statements, and press conferences associated with the Federal Open Market Committee (FOMC). So, when interest rates drop, investors start to turn away from bonds or other interest rate-linked instruments and turn to gold or Bitcoin (BTC). The closest development in this regard will be the FOMC meeting to be held on 3 and 4 May. How might Bitcoin, SHIB and altcoins react?
The effect of Fed rate hikes on Bitcoin, SHIB and altcoins
Markets have responded positively to the last 25 basis point gain, with the price of many cryptocurrencies rising as well. Analyst Qadir AK thinks the crypto market could react directly if the Fed chooses to raise interest rates in the short term. However, looking at the medium and long-term investment prospects, these monetary policy changes are expected to have little or no impact.
The FOMC will meet again on May 3 and 4
Representatives are expected to raise the Fed rate by 50 basis points at this meeting. It looks like they will also embark on a quantitative tightening approach. The central bank resorts to quantitative tightening to reduce the amount of liquidity in the economy. The FOMC meeting to be held on 3 and 4 May will undoubtedly affect the performance of the market after the meeting. However, other members of the crypto community believe that interest rates will remain stable. Investors will have to choose between bonds and stocks or cryptocurrencies that will be in high demand.
FOMC can raise interest rate
as Cryptokoin.com As we reported, the Fed held its first meeting of 2022 on January 25 and 26. At the first meeting, the FOMC indicated it could raise interest rates soon for the first time in more than three years. At the next meeting, the Fed proved correct in its two-day meeting on March 15 and 16. The FOMC ended the meeting by raising the federal funds rate target range by 25 basis points, which is falling within a range. Between 0.25% and 0.50%, the first Fed rate hike since 2018. As a result, the Fed’s escalating rate hike comes amid geopolitical uncertainty. According to reports, this is the first of several rate hikes expected in 2022, expected to rise from 1.75% to 2% and then from 2% to 2.25% by the end of 2022.
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