The cryptocurrency market is now making small changes in line with the U.S. interest rate policy. The U.S. Department of Labor's job vacancy survey released last week was far below market expectations, pushing up funds into Bitcoin and causing the price to rise from $68,000 to $71,000. The main buying came from the Bitcoin spot ETF. Now the trading volume in the cryptocurrency market has little impact on the market price, and the greater price fluctuations are still the changes in ETF funds.
Last Friday, the U.S. Department of Labor released the "non-farm payrolls data", which showed a sharp increase of 277,000 jobs, far higher than the 180,000 expected by economists. As a result, the market's expectations for maintaining interest rates have reversed and strengthened. Bitcoin has been slightly revised down to US$70,000, and Bitcoin ETF funds have also seen a net outflow. Ethereum showed a slight downward trend last week due to the excessive increase in ETF themes a while ago, but overall the cryptocurrency market's weekly gain is still positive.
BNB was the best performing coin in the cryptocurrency market last week, with its price rising to nearly $700, thanks to the excellent performance of Launchpad. The pre-sale of tokens was much better than market expectations, and the crypto market still has sufficient momentum. Investors do not have to worry about a market crash. We would even say that the market has risen too much, and investors are even looking for reasons for a decline. The only risk at present is probably the Fed's interest rate policy, but interest rate policy basically does not pose a risk.
If you carefully compare every change in the interest rate direction, you will find that when the interest rate hike is strengthened, the currency price will fall slightly, but if there is news of a rate cut, the currency price will rise sharply. In this way, the currency price continues to climb upward. We don’t even think that the so-called "non-farm employment" last week was bad news.
The market is rising strongly, and non-agricultural employment is just a meaningless statistic
New non-farm payrolls have always been the employment report data that the Fed focuses on. The news said that non-farm payrolls in May increased by 272,000, higher than the 180,000 estimate after the economists' questionnaire survey, and the book figure was also higher than 165,000 in April. In addition, the average annual salary growth rate reached 4%, indicating that the US employment figures are still strong. Although the US technology industry continues to lay off employees, the greater demand for new blue-collar workers and tourism has kept the US job market resilient.
Even after reading the above interpretation, it actually has little impact on the market. Even if employment is good, the Fed policy is only to maintain the current interest rate level. Although it is a 20-year high, the U.S. stock market and the cryptocurrency market continue to set new highs. Once employment is not good, the market will blow the horn of interest rate cuts, and funds will directly rush to risky assets, thereby pushing up prices. The same principle applies to the U.S. stock market and the crypto market. If nothing unexpected happens, the crypto market will continue to set new highs.
Even though multiple economic data point to a strong U.S. economy and the market is threatening investors that the high interest rate environment will last for a long time, we believe that it is no longer an effective factor to regard interest rates as a negative risk. Most funds in emerging countries are now concentrated in U.S. stocks, and asset prices are not afraid of interest rates at all as a large amount of funds are chasing them. On the contrary, with a strong U.S. dollar, these non-U.S. countries can not only make price differences but also exchange rate differences.
June 13th is the June FOMC interest rate decision. Currently, Fed Watch interest rate futures show that 98% of the positions show that the Fed will maintain the current interest rate level, but there is a 50% probability of a one-basis rate cut starting in September, and another one-basis rate cut in December, a total of two rate cuts, which will drive asset prices to rise further. The cryptocurrency market also has the opportunity to benefit from the listing of the Ethereum spot ETF to drive the next wave of gains, and the upward space is expected to be 20%.
It is expected that the target price of Bitcoin after the Ethereum spot ETF is listed will be US$84,000, while Ethereum will reach US$4,500. Although the US capital is tightening, the influx of foreign funds into US stocks continues to push up asset prices. Investors do not have to worry about a market crash. It is expected that asset prices will continue to set new highs under the repeated cycle of correction and rise.
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