Why Crypto Spiked Today in the Face of Bad News?
- 2 years ago
There are several reasons why the crypto market soared today, despite the recent bad news. These include the shifting monetary policy of the U.S. and heightened volatility. They also include War and inflation. While the broader financial system may not be at risk, the recent downturn has raised concerns about the market's stability. While many analysts aren't convinced that the market is in danger, the recent downturn has sparked serious concerns.
Enhanced volatility
Recent market volatility has been particularly high, with Bitcoin losing more than 50% of its value in just the last few months. Despite this, many investors have still remained confident in the future of the digital asset, even in the face of the recent high-profile financial meltdowns that have wiped hundreds of billions off the market. Recent high-profile meltdowns have triggered a flight from the cryptocurrency market, with the market value now less than $900 billion.
Despite recent high volatility, the price of Bitcoin is still well below its all-time high, highlighting the importance of the cryptocurrency market for retail investors. According to Mohamed Damak, sector lead at S&P Global Rating, a meaningful fall in the value of Bitcoin today would not significantly affect the creditworthiness of banks in our rating methodology. But investors have a right to be nervous. While volatility is high today, this volatility is only a temporary phenomenon.
Shifting U.S. monetary policy
If you're an investor, you've probably been looking beyond today's headlines to what's ahead. After all, the Fed's rate hikes have already affected stocks, commodities, and many other investment assets. In fact, the Fed has already raised rates three times this year. As such, the markets already sat up when the Fed was about to tighten monetary policy. For the time being, however, analysts expect cryptocurrency prices to rise in 2022. Moreover, the rise in rates is likely to offset short-term declines, assuming more retail active traders and institutional investors begin investing.
The Federal Reserve's shift to a dovish stance could be a significant factor in driving cryptocurrency prices higher. During the past decade, the U.S. economy has suffered many shocks, and it has not always been good. Despite these setbacks, the central bank has taken actions to maintain financial stability. The S&P 500 is down 18 percent year-to-date, and the Nasdaq Composite is down 26 percent. In addition, the U.S. dollar has fallen 78 percent from its highs in late 2021.
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Enhanced volatility
Recent market volatility has been particularly high, with Bitcoin losing more than 50% of its value in just the last few months. Despite this, many investors have still remained confident in the future of the digital asset, even in the face of the recent high-profile financial meltdowns that have wiped hundreds of billions off the market. Recent high-profile meltdowns have triggered a flight from the cryptocurrency market, with the market value now less than $900 billion.
Despite recent high volatility, the price of Bitcoin is still well below its all-time high, highlighting the importance of the cryptocurrency market for retail investors. According to Mohamed Damak, sector lead at S&P Global Rating, a meaningful fall in the value of Bitcoin today would not significantly affect the creditworthiness of banks in our rating methodology. But investors have a right to be nervous. While volatility is high today, this volatility is only a temporary phenomenon.
Shifting U.S. monetary policy
If you're an investor, you've probably been looking beyond today's headlines to what's ahead. After all, the Fed's rate hikes have already affected stocks, commodities, and many other investment assets. In fact, the Fed has already raised rates three times this year. As such, the markets already sat up when the Fed was about to tighten monetary policy. For the time being, however, analysts expect cryptocurrency prices to rise in 2022. Moreover, the rise in rates is likely to offset short-term declines, assuming more retail active traders and institutional investors begin investing.
The Federal Reserve's shift to a dovish stance could be a significant factor in driving cryptocurrency prices higher. During the past decade, the U.S. economy has suffered many shocks, and it has not always been good. Despite these setbacks, the central bank has taken actions to maintain financial stability. The S&P 500 is down 18 percent year-to-date, and the Nasdaq Composite is down 26 percent. In addition, the U.S. dollar has fallen 78 percent from its highs in late 2021.
⭐ Find us online: https://my.bio/cryptonews