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High U.S. inflation, Fed from dove to eagle

2022-01-19T09:20:01.684Z


In the past five years, Bitcoin, the world’s largest cryptocurrency by market capitalization, has risen by an astonishing 4,300%. Since the US Federal Reserve’s quantitative easing (QE) release in the fall of 2020, sufficient capital and liquidity have become even more important.


In the past five years, Bitcoin, the world’s largest cryptocurrency by market capitalization, has risen by an astonishing 4,300%. Since the US Federal Reserve’s quantitative easing (QE) release in the fall of 2020, sufficient capital and liquidity have set off a wave in the cryptocurrency circle. Crazy like never before, even the bull market in U.S. stocks in 2021 will be dwarfed by that.


However, such a crazy cryptocurrency has been in a rare slump of late.

$3 trillion, $2.2 trillion, $1.9 trillion, which is the total market capitalization of global cryptocurrencies in November last year, early January this year, and last week.

Cryptocurrencies are extremely sensitive to liquidity and market sentiment, and the decline in cryptocurrencies is an early reaction to the Fed’s monetary policy shift.


Invesco strategist Paul Jackson expects Bitcoin to fall to the $34,000 to $37,000 level by the end of October, and possibly even below $30,000 within the year.

(Invesco)

In 2021, Bitcoin rose to a high of $68,000 and has now fallen to the $42,000 level.

Paul Jackson, a strategist at U.S. asset management firm Invesco, said that the market's "financial mania" for Bitcoin over the past few years reminded him of the "Great Crash" of 1929. It will drop to the $34,000-$37,000 level by the end of the month, and may even drop below $30,000 during the year.

U.S. stocks, cryptocurrencies, and even non-fungible tokens (NFTs) derived from them are all built on the premise of abundant capital in the market.

Now, regardless of any data and any assessment of the U.S. economy, the Federal Reserve has come to the moment when it needs to "close the valve", and people from all walks of life generally believe that the Fed will shrink its balance sheet and raise interest rates in March.

However, will the Fed really accelerate monetary policy tightening this year, as the market expects?

How will this affect the midterm elections to be held in November?

For details, please read the 300th issue of "Hong Kong 01" Electronic Weekly (January 17, 2022) "The

Federal Reserve's "March Window Period" from the Cryptocurrency Market

.

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Other exclusive highlights of

the

300th issue of "Hong Kong 01" e-Weekly News :

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Source: hk1

All news articles on 2022-01-19

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