Joining in on the tech stock rout, cryptocurrencies were hammered with bitcoin plummeting to around US$42,200 at the time of writing, as what the Fed giveth, the Fed can also taketh.- Some analysts however still see pockets of opportunity against the broader rout in cryptocurrencies, with Fundstrat digital asset strategists Sean Farrell and Will McEvoy writing in a note yesterday,
Bitcoin slumped to its lowest level since last December’s great deleveraging flash crash as growing expectation of increased borrowing costs weigh on investor appetite for the most speculative assets.
Joining in on the tech stock rout, cryptocurrencies were hammered with bitcoin plummeting to around US$42,200 at the time of writing, as what the Fed giveth, the Fed can also taketh.
Bitcoin has surged by over 500% since the end of 2019 in the wake of pandemic stimulus measures, but review of the Federal Reserve’s meeting minutes has spooked investors as the central bank appears to have turned decidedly hawkish.
Some analysts however still see pockets of opportunity against the broader rout in cryptocurrencies, with Fundstrat digital asset strategists Sean Farrell and Will McEvoy writing in a note yesterday,
“Given the current macro backdrop, leverage within the Bitcoin market, and recent robustness seen in the altcoin market, we think it’s appropriate to be overweight Ethereum and other smart contract platforms.”
“We probably would not bet the farm near-term on Bitcoin but think there is an opportunity in going long volatility via derivatives strategies.”
Persistent inflation is forcing the hands for the central banks of major economies and increasing pressure to raise rates, which is leading to a volatile period for financial markets and threatening to reduce the liquidity that lifted all asset classes.
