The world of digital assets has initiated the year on a bearish note. Such that fear and uncertainty have gone rife like wildfire. The crypto town has been widely affected by the wrath of the market cycle and external factors. To an extent that the business has incurred losses tallying to trillions of dollars.
While the industry is yet to retrieve from the losses of the recent market crash. Proponents from the business are expecting another crash, as the FOMC meeting fast approaches the scheduled date. Wherefore, folks from the crypto town are engulfed in fear and uncertainty. In the interim, critics have been criticizing the industry, whilst traders fear catastrophic events.
What To Expect From The FOMC Meet?
Financial markets have been fretting over the FOMC meeting and its broader implications. The next FOMC meeting is scheduled for Jan 25 / Jan 26. Netizens are expecting the FOMC likely to use the forthcoming meeting to hint at March lift-off. Other speculations include a hike in interest rates at intervals, quantitative tightening, and balance sheet reductions.
The necessary amendments made by the authorities would be in an aim to counter burdening inflation, and the drowning economy. Successively, the Federal Reserve is expected to reduce its balance sheets if financial conditions do not deteriorate. If it happens, quantitative tightening could be onboarded. Quantitative tightening is expected to be an agenda for the meeting, it is crucial as it would dictate the market’s projection.
In addition, rising interest rates are a persistent concern, which would lower the purchasing power of the masses. Moreover, authorities had earlier cited that it could cease its asset purchases temporarily. Rising interest rates, implementing quantitative tightening, balance sheet reductions will have an impact on equity markets. Which in turn will have adverse impacts on the crypto industry.
Will This Event Pin The Bubble?
As previously discussed, the equity markets are now more interlinked with the crypto market. Consecutively, the S&P 500 index has been dragging down exchange markets to a greater extent. And the implications of the FOMC meeting will have direct and indirect impacts on the broader crypto market.
Critics are now reconciling tragic events from the past, like the tech bubble from the early 2000s, the mortgage crisis from 2008/09.
And are now fretting over the crypto bubble, whilst expressing concerns over the ongoing economic imbalances. A fate like that would be unlikely, as in due course of time folks would hop onto cryptos for a meteoric rise.
Summing up, the FOMC meeting has led to economists, financial experts, and savvies pinning hawk’s eye on the amendments. As the implications of the meetings will have impacts on the interconnected global economy.
The rising interest rates is one factor, that masses from the industry are keen on, as it would curb the buying power of investors.
We can expect steep plunges in the crypto-verse following the FOMC meeting. That said, until the bulls are chained in stables, buyers should probably lose their pockets for potential bags.