It is just right that the February U.S. Consumer Price Index has accelerated. This coincides with expectations. At 7.91%, the index stands. This was to be expected. peak during Q1This year’s levels will be maintained at an all-time high.
The Federal Reserve and the other central banks want to increase the monetary policy in order for people to believe they can stabilize prices.
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Bitcoin’s value has fallen since December as the 10-year yield rose and credit became more expensive.
Review of Market Inflation
The credit market recognizes that inflation will continue to be a problem. This is why interest rates are expected to rise. Interest rates rise as credit instruments are sold. People find it more difficult to get things they need.
Dylan LeClair (senior analyst, Co-Founder 21stParadigm) said;
Fixed income doesn’t react well to (accelerating) inflation at four decade highs, who would’ve thought?
Higher rates in a historically over-indebted economy; the market is doing the Fed’s hike cycle for them.
It is likely that things will fall apart faster than people think.
Furthermore, there are increasing financial conditions as well and an unwinding in leverage (in legacy market, such that bitcoin derivatives have already been de-risking).
Here’s the deal: LeClair tweeted;
The last three months have seen fixed income disappear. Accelerating inflation, slowing down growth all over the board. As deleveraging continues, a gradual and sudden decline in liquidity is occurring. BTFD conditions across markets has turned into “sell the rip”.
This regime’s end will be marked by liquidity crises in legacy markets. These likely have a negative effect on bitcoin prices. Then, there is a return to quantitative easing, and eventually, control of the yield curve by central banks.
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Blockchain has proven its utility regardless of the state of the global economy. The case for a non-sovereign scarce digital monetary asset has never been stronger, and investors should embrace this new trend before it’s too late.
Crypto Market Insight
The cryptocurrency market has been fairly calm over the last 24 hours.
Yesterday’s US markets dive was in reaction to fresh inflation figures that showed prices rising at an annual rate of 7.9% over the past three months and raising fears about future tightening from monetary policymakers across Europe, Asia, and America – with all eyes fixed on when they will tighten their own purses.
Top ten cryptocurrency’s were relatively stable. Only a handful showed 1% to fewer movement. Avalanche was the top cryptocurrency, with a gain of 2%. Finally, Polkadot is adding 5%, making it the first time in quite a while that we’ve seen growth this high. Bitcoin’s value increased by 1.08%
Featured Image from Pixabay. Chart by Tradingview.com