Rising prices: why Bitcoin and gold keep falling

锐思财经 view 9182 2022-1-10 14:43
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Since the start of 2022, Bitcoin has fallen for seven consecutive days. It fell 15.3%, from a high of $ 47,954 a coin on January 1 to a low of $ 40,610 a coin on January 7. Ethereum's current market price is $ 3,212 per coin, down 17.6% year-to-date.

Market confidence was affected on January 8, the Bitcoin Panic and Greed Index (FGI) was 10, down 8 points from the previous day. The warning escalated and the water level was still "very scary". The deadline for FGI is 10 days until June 2021.

he can say,The entire cryptocurrency market has shrunk.. Unlike the rapid decline in December, this correction in the cryptocurrency market has been going on for some time.The reason for the decline is close to the global financial market.12monthly improvement in the non-agricultural wage bill;90% of the Fed's rate hikes in March.

According to the U.S. non-farm employment report released the evening of January 8, the number of non-farm workers rose only 199,000 after changing the non-farm season in December, the smallest increase since January from last year and well below the picture. Approximately 400,000. Price range from 210,000 increments to 249,000 increments.At the same time, the unemployment rate in December was 3.9%, well above the expected 4.1%.

Although employment growth in December was weaker than expected, all performance indicators such as unemployment, falling U6 prices and participation showed positive improvement and wages increased better than expected. In addition to key data, salary growth was also higher than expected, up 0.6% from the previous month and 4.7% from the same period last year. The rate is stable at 61.9%. Overall, the job description shows good business practices.Not only was unemployment decreasing, but staff participation was similar and the overall staff size was increasing.

US Treasury futures show a 90% chance that the Fed will hike rates at its March meeting following the release of US employment data.Analyst Chris Anstey also said:All in all, nothing can stop the Fed from raising interest rates in March.

After the data was released, the 10-year financial yield hit 1.771%, continuing to break its highest level since March 2021. The US yield fell 20 points in the near term, as non-US funds rose in aggregate. Spot gold fell $ 10 an ounce in the narrow range to $ 1,789.18. All three of the major US stock markets fell. ~Bitcoin immediately fell from $ 2,196 to $ 40,565 per coin.

Investors have often led to a slowdown in world trade for whatever reason with the Fed's plans to raise prices earlier than expected. Expectations that Bitcoin could fall further in the precious metal are also decreasing.

You can view the December FOMC meeting minutes released by the Fed at 3 a.m. Beijing time on January 6. The minutes show that many participants that the contract value must be faster than the contract equivalent. The environment before the standardization of monetary law. After the minutes were released, global financial markets reacted quickly to the Fed's anticipated hike, and 10-year US Treasury yields surged amid lower gold and currencies. On the same day, Bitcoin fell more than 9%, from $ 46,615 to $ 42,416 apiece.

The anticipated Fed debt and rising inflation mean that slowing inflation has led investors to anticipate a faster pace, and the global water release from the spread may slowly come to a halt.The past few minutes have been said to "cause monthly assets to decline," and interest rate expectations have risen further. As the Fed lowers its balance sheet and raises interest rates in "cold" markets, assets, including markets and currency markets, are expected to fall.

the turn of the recession

Or do you want to make sure that Bitcoin is a risky and unsecured asset?

Since the launch of the new cryptocurrency in 2019, Bitcoin has grown by more than 500% after the launch of support packages in several countries. But after the Fed hinted at an increasingly rapid rate hike, Bitcoin was immediately devastated.

Commenting on the decline of Bitcoin during this period, Stéphane Ouelette, co-founder and CEO of the cryptocurrency platform FRNT Financial Inc., said: "While there are differences when it comes to inflation, cost savings, etc., your negative reaction to cryptocurrencies is to view them as a dangerous asset."

The rationale behind the Fed's drop in the eagle release cryptocurrency is that against the backdrop of global flooding since the spread began, some financial markets have worried about financial problems due to overspending. . We buy risky assets to protect financial confidence. So not only have US commodities hit new highs since 2020, but cryptocurrencies, led by Bitcoin, have also risen, faster than the $ 1,000 billion mark.

However, since 2022, the Bitcoin market has been at the bottom of the real estate market. According to Wind data, among the world's largest asset movers, Bitcoin fell -9.09% to the lower level. In 2021, Bitcoin took the top spot with a profit of 57%.Bitcoin yog volatile, David Donabedian, Chief Investment Officer of CIBC Private Wealth Management, said over the phone “This is a speculative investment and the volatility will remain high for a long time."

Cryptocurrency is classified as a risky asset in the market and is directly affected by global financial markets.The performance of high value metals is also rarely recommended. Gold once fell below $ 1,800 and its temporary settlement price of $ 1,796.63 an ounce before the news broke.

Why is gold, which is considered a treasure, so suddenly refused?According to the analysis, gold fell below $ 1,800 against the evolution of interest rates.

Recent comments from both houses of the Fed have raised business expectations for a Fed rate hike.High interest rates as market interest rates rise, lower prices are generally associated with higher prices,High interest rates generally equate to low interest rates.

Always availableExpectations of rising interest ratesUnder these circumstances, the nominal yield on US Treasury bonds rose sharply, causing the break-even point of market interest rate inflation to fall, and gold gained relatively high volatility.The Bulls take advantage of this to stabilize, while the Bears take advantage of the fall in the price of gold.

Historically, gold was not strong enough to stay stable in the $ 1,850 range, but when interest rates were to rise, gold immediately fell. .

In the event of high inflation, we can say that the US economy has entered the stage of stagflation. In the cycle of stagflation, inflation is still at a high level, but the economy has not grown.Money is kingcase. Therefore, as a security toolDue to the double squeeze of American power and rising real earnings, there is little power for gold to rise.

A few days ago, Dr. Craig Wright shared his thoughts on Bitcoin, Gold and Cash. He said in the article that the current digital currency exchange (like Coinbase) works the same as the so-called gold standard banking system. When you trade in most digital currencies, you are not actually trading digital currencies. for

“Coinbase, Square, and other retailers have followed the banks, ignored the law, and removed consumer protection, turning money into forced gambling. No one knows what they have.” Therefore, Dr. Craig Wright believes that Bitcoin cannot be considered digital gold, at least at this point he is willing to talk about Bitcoin more than risky assets or commodities.

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