Federal Reserve's Position on Monetary Policy Unchanged: What Does It Mean for Crypto?

Crypto markets have been in an absolute crack since the beginning of 2021. Bitcoin and Ethereum, two of the largest cryptocurrencies by market cap, have increased 97% and 303% respectively since the beginning of the year. Bitcoin (BTCUSD) and Ethereum (ETHUSD) at Tradingview.com A strong supporter of the recent success of the nascent crypto industry is a clear paradigm shift; Institutional investors no longer see crypto as an unstable and dangerous asset class. From the direct listing of Coinbase, which made headlines on Wall St., to Singapore's sovereign wealth fund Temasek, which bought Bitcoin, the growing adoption of these digital assets is evident. Sure, there are many factors that led to this rapid corporate adoption, but what drove many companies to adopt the same asset class they once avoided? The answer is extremely low interest rates and rising inflation. Why Will Federal Reserve's Current Monetary Policy Take Advantage Of Crypto? On Wednesday, the Central Bank announced it would keep interest rates at current levels while continuing to purchase $ 120 billion in assets per month. Amidst immunization progress and strong political support, economic activity and employment indicators strengthened. Sectors most affected by the pandemic remain weak but have improved. "With the economic recovery of the pandemic and rapid money supply growth, the Fed's long-term target of 2% inflation is likely to hit the target." “This is positive news for the crypto markets, as institutions will continue to focus on digital assets to guard against rising inflation and the weak dollar that is unlikely to raise interest rates in the foreseeable future,” the central bank said to combat inflation.

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