Spooky feds, Bloomberg bulls and finding a balance

A recent move y the Us Feds to increase interest rates has had an adverse effect on the crypto market. According to news outlets, the release of minutes of the meeting led to a 14% drop in Ethereum and a 9% drop in Bitcoin.

Ethereum also famously lost against Bitcoin after the release of the minutes. Information from Cointelegraph showed that;

The minutes showed that the Federal Open Market Committee (FOMC) is in favor of raising short-term rates “sooner or at a faster pace than participants had earlier anticipated.” According to the CME Group, trading in the interest-rate futures market showed a two-thirds possibility of the first increase in March.

Increasing interest rate basically strengthens interest in the dollar. Think of it as the feds' own way of fighting against dollar inflation by incentivising it through increased interest rates.

The dollar still remains the most powerful currency in the world and despite that power being threatened by numerous assets including Bitcoin(that's more like gold), it's nice to see that the feds still have some tricks up their sleeves.

Still very bullish

On the flip side, a Bloomberg analyst has claimed that cryptocurrencies are still set to have an extremely successful year. According to the analyst;

A key issue we see is the Federal Reserve, as it faces the greatest inflation in four decades, more inclined to raise interest rates if risk assets continue climbing,”

How cool is that though? The same reason why Bitcoin and Ethereum are struggling is the same reason why an analyst sees a prosperous mid and long-term future for cryptocurrencies.

According to the analyst, while the increase in interest rate favours the dollar, it may, in turn, make Bitcoin and cryptocurrencies more attractive than traditional stocks.

The predictions put Bitcoin at around $100k and Ethereum trading up to $5k. The predictions also had kind words for Solana, BNB, and a few other unnamed cryptocurrencies climbing into the top five.

A top member at Goldman Sach also had some interesting things to say about Bitcoin in particular.

(Pandl)...suggested that Bitcoin could overtake 50% of the store of value market share over the next five years, with BTC price potentially surging over $100,000 by capitalizing on gold’s market share.

These predictions point at the possibility of more institutions throwing their weight behind Bitcoin. Naturally, this will have a net positive effect on the general crypto market.

Don't panic

Things are bad right now but trust me when I say they could get much worse.
Over the past 12 months, virtually every asset saw decent pumps, with assets like solana doing up to 7000% in the process.

This means that if we were to just take this current market situation n the surface, and treat it like a correction, then there's a chance that assets could drop further.

The bears are winning right now but that's how the game goes. You win some and you lose some, you have to be flexible in either situation.

Institutions are still interested in diversifying their portfolio. Last year a record number of big names showed some interest in cryptocurrencies.

The analysts are all saying the same thing about the long-term success of cryptocurrencies. So, while the short term does seem bleak, know that this isn't the end of the world.

There's a lot of excitement about the future of the crypto market and the reds in the market are just a distraction. 2022 is still going to be big for the industry but only diamond hands will taste the profit.

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