It is not independent bitcoiners who have control of BTC, but central bankers. After Fed Chairman Jerome Powell announced a long, hard fight against inflation on Friday, bitcoin has done what stocks do when they do: it fell. While bitcoin was still trading at $24,000 almost two weeks ago, the price finally dropped below the $20,000 mark on Sunday.
With this, the crypto-asset gains in July and August have become enormous after the crash months leading up to the summer. Although the low for the year of 17,770 euros is still a little off, there is a slight silver lining on the horizon. Bitcoin has always reacted extremely sensitively to US monetary policy announcements, especially in 2022. This time again. The prospect that Powell gives is bleak. He predicted that the average interest rate would be a little less than 4% by the end of 2023. The US prime interest rate, which currently hovers between 2.25 and 2.5 percent, is set to rise again in September, after which it will already fall to three percent.
US declaration of war on inflation sends crypto and stock prices crashing
Ethereum: the wind is out
Ethereum, the eternal number two in the crypto market, is also barely going down. ETH has had a very strong week over the summer as investors rejoiced at the prospect of The Merge. Ether climbed up to around EUR 2,000 in the summer, but has now fallen back to below $1,500, or the EUR. However, because ETH has shown relatively high growth, the coin is still a long way from its year-to-date low of EUR 899 in mid-June.
Enthusiasm about the expectation of technological upgrades for Ethereum is out of the market. Switching to Proof of Stake will significantly reduce the energy consumption of Ethereum and make the blockchain green. But the closer the merge comes, the more unstable things look. On the one hand, software updates are always important – especially when open-heart surgery is taking place; On the other hand, there are now increasing signs that Ethereum is becoming more and more centralized. And it’s not conceptually optimal for a blockchain (Trending Topics reported). While Ethereum was actually built heavily on the cloud services of Amazon, Hetzner, Google and Co during mining, 4 players (Lido Finance, Binance, Coinbase and Kraken) already dominate the stakes, putting together 60 percent Control multiple validators.
Crypto Market Under $1 Trillion
The rest of the crypto market is no better, with its market capitalization slipping below the one trillion euro/dollar mark over the weekend. Crypto is doing what the stock is currently doing – just a lot more powerfully. Traders had to suffer heavy losses due to the end of trading in the stock markets on Friday. Major indices such as the Dow Jones, S&P 500 and Nasdaq 100 have fallen as much as three to four percent — meaning the bulk of their gains over the summer have been wiped out.
- ethereum = blau
- bitcoin = orange
- Dow Jones: Turquoise
- S&P 500: Violet
- Nasdaq 100: Yellow
- dx: pink
That’s why bitcoin fanatics should continue to question what is the often-implemented inflation protection. Instead of making up for the losses of fiat currencies, BTC, ETH and company continue to behave like speculative tech stocks and assets that do not offset inflation rates – currently only the rapid rise of war profiteers from the energy and defense industries. Only stocks can do this. ,
Bitcoin as an inflation hedge? True, if you consider one thing
