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Bitcoin, Ethereum, and many other assets have experienced certain degrees of healing in the year 2023, a big turnaround from the previous 12 months, though the fact remains that the Fed is still looking into hiking rates, and another rate jump could be right around the corner.
The Fed Could Hike Rates Again
It appears many traders and investors are watching these primary crypto assets with very careful eyes given they’re worried about the prices of these assets and others again sinking to new lows with the Fed looking to hike rates further as early as in the next few weeks.
Also, the U.S. is facing issues with its present debt ceiling. The country is in danger of potentially losing further cash and being fully broke soon, and Janet Yellen – the current Treasury Secretary – is saying the ceiling must be raised if America is to maintain its present level of functionality.
During all this, you have individuals like Geoff Kendrick – head of foreign exchange research at Standard Chartered – suggesting that bitcoin would wind up reaching a new high of about $100K per unit. This is because cash in the U.S. and abroad is no longer seen as the stable, staple fiat currency it once was, and people are looking to transition their money into other outlets so they can maintain their wealth during times of economic strife.
He said:
The optimal trade would probably be long bitcoin, short Ethereum. That sort of mix would probably be a good expression of this.
Yellen is warning that the U.S. could run out of money soon and that this would ultimately rattle the global economy in ways nobody has ever thought possible. She explained in a note to Congress:
After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government’s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.
In the meantime, the Fed has explained that interest rates could soon be at a whopping 5.25 percent, the highest they’ve been since the year 2006. Antoni Trenchev – co-founder and managing partner at crypto lender Nexo – said:
Investors are focused on what the Fed does Wednesday. If the Fed indicates it’s not done raising rates, all bets are off for crypto and other risk assets.
Is BTC Being Viewed More Positively?
Simon Peters of e-Toro fame also threw his two cents in, saying:
Bitcoin’s rally has taken something of a new aspect in 2023. Unlike last year, where the crypto asset took losses alongside economic worries and general pullbacks in investment markets, bitcoin has become something of a rallying point for investors and seems to be living up to its ‘digital gold’ character [now].
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