Federal Reserve’s July meeting minutes reveal concerns about inflation risks
The decline in cryptocurrency values on Thursday was triggered by the disclosure of the Federal Reserve’s July meeting minutes. These minutes revealed that officials are concerned about “upside risks” to inflation, which could lead to further interest rate increases. Many had expected the central bank to refrain from making any more rate adjustments this year. The concerns about inflation and potential rate increases caused a decline in the stock market for two consecutive days and led to the 10-year U.S. Treasury yield reaching its highest level since 2008.
Bitcoin’s value drops 4.3% following Fed’s interest rate adjustments
Bitcoin, the largest cryptocurrency by market capitalization, saw its value drop by approximately 4.3% following the Federal Reserve’s interest rate adjustments. This is notable because Bitcoin has a low correlation with the stock market, as noted by Coin Metrics. However, Bitcoin has reacted strongly to the Federal Reserve’s strategy to control inflation in the past, reaching a record high earlier this year. The decline in Bitcoin’s value following the Fed’s rate adjustments suggests that investors are closely monitoring the central bank’s actions.
Stock market declines for consecutive days, Treasury yield reaches 2008 peak
The stock market experienced a decline for two consecutive days following the release of the Federal Reserve’s meeting minutes. The concerns about inflation and potential rate increases raised by the Fed led investors to sell off their holdings, causing a decrease in stock prices. Additionally, the 10-year U.S. Treasury yield reached its highest level since 2008, indicating that investors are demanding higher returns on their investments due to inflation concerns.
Bitcoin reacts to Federal Reserve’s inflation control strategy
Bitcoin has been known to react to the Federal Reserve’s actions and strategies to control inflation. The cryptocurrency reached a record high earlier this year, in part due to the Federal Reserve’s commitment to keeping interest rates low. However, the recent rate adjustments by the central bank have caused a decline in Bitcoin’s value, suggesting that investors are uncertain about the impact of the Fed’s inflation control measures on the cryptocurrency market.
Volatility of Bitcoin and Ethereum at multi-year lows, major altcoins also down
Recent data from Kaiko shows that the 90-day volatility for both Bitcoin and Ethereum has decreased to multi-year lows. This could indicate a period of relative stability for these cryptocurrencies, although the decline in their values following the Federal Reserve’s rate adjustments suggests that they are still influenced by macroeconomic factors. Other major cryptocurrencies like Binance Coin, Ripple, Cardano, Solana, and Dogecoin also experienced declines on Thursday, ranging from 1.2% to 5.6%. Additionally, technical issues surrounding the launch of the Layer 2 network Shibarium led to a 10.5% decline in its associated cryptocurrency, Shiba Inu, and significant declines in its governance tokens.
OUTRO: The decline in cryptocurrency values on Thursday can be attributed to concerns about inflation and potential interest rate increases raised by the Federal Reserve’s July meeting minutes. The stock market also experienced declines for two consecutive days, and the 10-year U.S. Treasury yield reached its highest level since 2008. Bitcoin, in particular, reacted to the Federal Reserve’s inflation control strategy, with its value dropping 4.3% following the rate adjustments. The volatility of Bitcoin and Ethereum has decreased to multi-year lows, but they are still influenced by macroeconomic factors. Other major cryptocurrencies also experienced declines on Thursday. Overall, the cryptocurrency market is closely watching the Federal Reserve’s actions and their potential impact on the U.S. economic landscape.
Analyst comment
Negative news: The decline in cryptocurrency values and stock market declines were triggered by concerns about inflation and potential interest rate increases raised by the Federal Reserve’s July meeting minutes. Bitcoin’s value dropped 4.3% following the rate adjustments. The volatility of Bitcoin and Ethereum has decreased to multi-year lows, but they are still influenced by macroeconomic factors. Other major cryptocurrencies also experienced declines on Thursday. The market is closely watching the Federal Reserve’s actions and their impact on the economy.
