Will Cryptocurrencies Rise?
Even if all the problems disappear for now, the thing that will suppress the performance of cryptocurrencies in the medium term will be the Fed's policy. Inflation stopped falling and quarterly data did not arrive as expected. Although the Fed kept interest rates at the highest point, it started to target further dates for reductions with each passing month. While discounts were expected to start in March and a 150bp discount was expected at the beginning of 2024, the first discount is now expected in September.
The latest statements of Fed officials were that additional reductions in interest rates would be made if there were significant relaxations on the employment front. However, the latest unemployment data also diminished the hopes here. Today, Unemployment Benefit Applications data has arrived, which will help us see the current situation in the employment channel.
While the expectation was 215,000, the latest data was 211,000. Today the data came as 212,000. Following the below-expected data, Bitcoin price suddenly dropped below $62,000. The outlook remains negative for now, with incoming data not supportive for the market.
