The Fed’s Rate Hike: What Does it Mean?
On September 21, the Federal Reserve decided to crank up interest rates by a whopping 75 basis points. This new rate hike is just the beginning, as Fed Chair Jerome Powell hinted at another potential 125 basis points increase before the year wraps up. If this comes to fruition, we could see the benchmark rate soaring to around 4.4%, a far cry from the June estimates which only brushed the surface at 3.8%. We’re clearly in a monetary tightening era, folks!
Treasury Bonds: The Safe Harbor?
The expectations surrounding higher rates have caught the attention of many, pushing the 2-year Treasury yield up to a staggering 4.1%, marking its highest level since 2007. For investors looking to play it safe in this stormy economic sea, this might just seem like a cozy haven. In uncertain times, Treasuries can feel sturdier than stocks or cryptocurrencies, which are often seen as more high-risk ventures.
Pain for Risky Assets—Is Crypto Feeling It?
As free interest rates take their leave, the allure of riskier assets like stocks and cryptocurrencies could not only grow faint but also lead to a prolonged wait for a new market uptrend. The crypto landscape, especially, bracing itself for the impact of rising rates might just find itself in a tricky spot as investors reconsider their risk tolerances.
Bitcoin: A Champion in a Storm?
Despite the dark clouds looming over Bitcoin (BTC) and its altcoin counterparts, MicroStrategy isn’t ready to throw in the towel. This tech giant recently slipped 301 more Bitcoins into its digital wallet—bringing its grand total to a jaw-dropping 130,000 Bitcoins. With executive chairman Michael Saylor standing firm in his bullish beliefs regarding Bitcoin’s future, it seems they’re undeterred by the turbulent market.
Recovery on the Horizon?
With Bitcoin and altcoins finding their footing in reaction to the Fed’s actions, the burning question is: Could a recovery be on the way? Keeping a close eye on charts and trends of the top 10 cryptocurrencies will be pivotal in making predictions. Only time, and maybe a crystal ball, will tell! It may just be a case of “what goes down, must come up,” or perhaps a nifty little find in the treasure chest of cryptocurrency might be around the corner.
