I want to share with you where we are right now with the crypto market and the bitcoin price. Although we’ll see a bounce, eventually bounces are inevitable. Should we expect further downwards pressure for bitcoin and crypto throughout the rest of this year? I would think yes, because Jerome Powell has made it very clear they will continue to aggressively raise rates. If you still have doubts if it’s a good time to buy any crypto, use the Jet-Bot, the most popular copy trading platform. It allows you to earn from 200 percent to 2,000 percent APY. Binance trading bots can assist you in starting your own way. Sign up and get an access to the free 3-day trial period of using the platform.
As we reported, the Fed announced a 75 basis point increase, their most aggressive raise since the 90s. Well, their next meeting for the Federal Reserve is about one month from today in July. What does Jerome Powell say we should expect?
Be Prepared for the NEXT Fed Meeting in July
From the Jerome Powell’s speech:
‘In the coming months, we will be looking for compelling evidence that inflation is moving down, consistent with inflation returning to two percent. We anticipate that ongoing rate increases will be appropriate. The pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy. Clearly, today’s 75 basis point increase is an unusually large one, and I do not expect moves of this size to be common. From today’s perspective, at our next meeting, either a 50 basis point or a 75 basis point increase appears likely. We will, however, make our decisions meeting by meeting and will continue to communicate our thinking as clearly as possible.’
Jerome flat out say that although this was an aggressive increase, expect another large increase of either 50 or 75 basis points next month. That means we should expect further market suppression to come. And why are they doing this? Well, plain and simply to try and combat the crazy inflation happening this year.
Inflation IS NOT CLOSE to Ending Anytime Soon..
The next question is, how close are we to curbing inflation? Are we close? I thought this perspective was very interesting. This is the former Dallas Federal Reserve President, Richard Fisher, who has been in these rooms and has had discussions like this for years. Let’s listen to his reasoning and his explanation that inflation isn’t going anywhere anytime soon because of the talks he is having with so many private companies who are saying they’re not budging on the prices because they can’t afford it right now. This is the former Fed president of Dallas talking about inflation:
‘This takes 18 months to work its way through the economy. In the real economy, markets react instantaneously. Businesses can not do that. They have to figure out everything from lagging their payables to accelerating their receivables all the way through Capex, HR policy that works. Every company I talk to and every earnings report that I can get my hands on or my ear on is saying they’re going to take more pricing and they’re going to project this as long as they can to protect their margins.
If you look at the NFIB survey that came out yesterday, more companies are talking about taking aggressive pricing actions to protect their margins. These are not listed companies; they’re private companies. They employ half the people in this country that are workers historically. They have created 80% of all jobs. They’re all saying, going back 48 years of history, they’re going to take more aggressive pricing action to protect their margins.
So this is going to be a longer-term process. I wonder if 4% will be the top because I believe this is running longer and deeper and the Fed has a role to play, even if Powell is correct, thanks to Russia, Ukraine, and coveted lockdowns. Not everything’s under their control, but what is under their control they should act on, and they’re going to have to act and I think it’s going to be harsh.’
He flat out said at the end that he doesn’t think 4% interest rate hikes from the Fed will be enough. He thinks they’ll probably have to go more, and for perspective, right now I believe they’re at 1.5%.
Celsius is Making Moves! [UPDATE]
But what about the other stuff happening in cryptocurrency right now, like the potential bankruptcy of Celsius? Millions of investors are affected, as are the 3AC potential insolvencies. What’s the update here? Well, first off, let’s talk about Celsius. The good news is that although we’re not getting that many updates, we can look on chain at some of their loans and see that, behind the scenes, they do seem to be trying. For example, as of about two days ago, Celsius paid down 47.1 million dollars in Dai in stablecoin in the last few hours and the wrapped BTC liquidation level is now down to $14,000 with a 233 collateral to loan ratio. The point is how this affects you is that it appears that Celsius is trying to make moves, and in addition to the added collateral yesterday, they have paid down over 47 million dollars on a loan secured by almost 24 thousand bitcoins.
Will Celsius Go Bankrupt?
Moving forward, just to look at the other side of the bitcoin, because I don’t want to have no clue what’s going to happen to the celsius network. Many people are saying that the company is done, and if the worst should happen, here’s a thread on the Celsius network and bankruptcy:
It is very much a waiting game at the moment to see if Celsius can prevent insolvency.
“3AC Situation Is Even Worse Than I Thought”
By the way, this has very much been a cascading effect, starting with the Luna collapse. All these companies and hedge funds had money wrapped up in Luna to a degree, and we’re still seeing that ripple effect.
3AC’s liquidity providers are asking platforms to freeze 3AC’s funds to recover assets after litigation, so Danny Yuan said that their team detected that one million dollars was missing from their company’s funds at 3AC and they couldn’t get it back, so 3AC has gone silent to some of their clients.
Danny Juan, the CEO of trading firm eight blocks capital, called out to platforms that are holding funds owned by 3AC to freeze the assets. He explained that we’ve known them since 2018 and thought they were competent and didn’t think they were degenerate enough to lose billions and not employ basic risk management. Yes, the three arrows capital was highly regarded, and this was not done maliciously. This is just a basic case of bad risk management. Yuan tweeted,
So how this affects you is just plain and simple, starting with a bear market, starting with the Luna collapse, with Celsius, with 3AC. It’s sort of a cascading effect, and we’re still seeing this cascading effect, which does continue to put cell pressure negative pressure on the market.
STILL BIG OPPORTUNITY IN CRYPTO
We could always go over more news. There is always good news in this industry. For example, people are hiring. There is still an opportunity from CZ.
I love this good long-term thinking. It is also positive news for Decentraland. Yahoo is launching metaverse events for Hong Kong residents under restrictions, creating a brief rally for decentralized native token MANA. Here are the details: Yahoo, a U.S.-based internet media company, has announced that they will host a series of virtual events and concerts in the Decentraland metaverse for Hong Kong residents.
Why are they doing this? The company sees the metaverse as an attractive alternative for Hong Kong residents looking to engage in social activities while pandemic restrictions remain in force. In a direct quote from Yahoo,
“We hope to use the metaverse to connect people regardless of time and physical location, and to do this they chose Decentraland.”
That’s the news for today’s bull and bear markets.
[This article is a transcription of a video made by Altcoin Daily]
Original video: https://youtu.be/Rwyo7wPy73k ]