Update 02/08 below. This post was originally published on February 6
BitcoinBTC, Ethereum and other major cryptocurrencies surged in 2023, with a combined market cap of nearly $250 billion – leading some to believe the rally could take a long time to last.
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Update 02/08: Bitcoin price surged following comments from Federal Reserve Chairman Jerome Powell yesterday that the combined crypto market is on the verge of surpassing the $1.1 trillion mark – a level it hasn’t reached since August last year has reached. Powell, speaking just days after Friday’s “extraordinarily strong” US jobs report, said it would probably take a “significant amount of time” to completely eliminate inflation due to red-hot labor market data, but that “deflation The “process” was described as beginning “after the Fed raising rates to levels not seen before the global financial crisis of 2008”.
“We expect the Fed to believe a ‘significant’ decline in inflation this year is likely to start a year of significant opportunities for global investors,” Nigel Green, chief executive of financial advisory group De Vere, said in emailed comments. Is.” “Powell’s comments about the start of the deflationary process will now dominate the mindset of investors in 2023 as they look to seek and build wealth after a difficult 2022.”
Others have warned that markets could see some volatility if inflation data does not continue to decline.
“Federal Reserve Chairman Jerome Powell had the soothing message overnight that the market was looking for,” Ross Mold, investment director at brokerage AJ Bell, said via email.
Amid concerns that last Friday’s bumper jobs report would see the Fed react to what it perceived as an overheating labor market, Powell’s relatively relaxed response likely reflected the seasonal anomalies that often affect January numbers. Whether Powell will be so relaxed if the next set of payrolls data is similarly elevated is open to question and investors will be keeping a close eye on next week’s US inflation data for January. If there is any sign of an increase from , the market will react very negatively.
The price of bitcoin is now hovering around $23,000 per bitcoin, down from less than $17,000 at the start of the year. Ethereum ETH and other top 10 cryptocurrencies BNBBNB, XRPXRP, Cardano, Dogecoin, Polygon, and Solana also rallied, leaving some smaller coins in the dust.
Now, after last week’s hot US jobs report sparked fears of a return to aggressive Federal Reserve interest rate hikes, Fed Chair Jerome Powell is set to deliver a speech tomorrow in which he calls Bitcoin, Ethereum a shock wake-up call. can give. , crypto and stock market.
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Forbes veteran billionaire proposes a radical, dollar-beating ‘inflation-linked’ crypto rival to bitcoin and ethereum after extreme price volatility on aggressive Federal Reserve action in wake of stronger-than-expected jobs report Billy Bambru’s concern. Ethereum and other major cryptocurrencies BNB, XRP, Cardano, Dogecoin, Polygon and Solana are also at risk. SOPA Images / LightRocket via Getty Images
“Bitcoin’s momentum is slowing after January’s stronger-than-expected jobs report forced the market to brace for two more rate hikes,” Yuya Hasegawa, crypto market analyst at Tokyo-based BitBank, said in emailed comments. “
Friday’s non-farm payrolls report showed the US added just over 500,000 jobs in January, blowing out estimates of less than 200,000. Earlier in the week, Powell announced an interest rate hike of a quarter percentage point, an eighth straight increase but the smallest increase since March, and warned the “job” — to stamp out inflation — “isn’t fully done.” Is.”
However, Powell’s comments were received by the market on a more dovish side than expected, leading to sharp gains in bitcoin, ethereum, crypto and stocks.
Christina Hooper, chief global market strategist at Invesco, said the “jobs report” was an incredible surprise and it raises a lot of questions about what the Fed is going to do next. reuters, “I think that’s causing some volatility as the market is trying to figure out how the Fed will view it.”
Tomorrow, Powell will give a speech that will be closely watched for signs that he has turned flamboyant in the face of a booming job market. Federal Reserve Bank of New York President John Williams is also scheduled to speak on Wednesday.
“Given last week’s failure to completely quell the market’s optimistic rate outlook, Fed members will continue to remind the market that the federal funds rate will climb above 5% and remain there throughout the year,” Hasegawa said.
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While last week’s surprisingly strong jobs data raised fears of aggressive Federal Reserve action, some believe the better-than-expected numbers may simply be “seasonal noise.”
“The 517,000 increase in total employment was almost certainly a function of seasonal noise and the traditional churn in the early-year job and wage environment, and which already had a strong contraction in hiring,” said Joe Brusuelas, chief economist at consulting firm RSM US. trend,” is exaggerated. in client note seen by political man,
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I am a journalist with significant experience covering technology, finance, economics and business around the world. As Founding Editor of Verdict.co.uk I cover how technology is changing business, political trends and the latest in culture and lifestyle. I’ve covered the rise of bitcoin and cryptocurrencies since 2012 and characterized its emergence as a niche technology as the biggest threat to the world’s established financial system and the most important new technology since the internet. I have worked and written for CityAM, Financial Times and New Statesman. Follow me on Twitter @billybambrough or email me at billyATbillybambrough.com. Disclosure: I occasionally hold small amounts of bitcoin and other cryptocurrencies.
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Source: www.forbes.com
