The cryptocurrency market dipped after investors analyzed Fed's latest meeting minutes.
Though the stock market sees a lucrative start today, cryptocurrencies tumbled as investors scrutinized the recent Fed Reserve meeting minutes. While publishing this content, Bitcoin hovers at sub-$29K, losing 2.51% within the past day. Meanwhile, DOGE and SHIB lost over 5% to trade at $0.07803 and $0.00001049.
Fed released its minutes for the May meeting yesterday, revealing that Fed Reserve will impose stiffer monetary policies than thought. For instance, market players have expected the Fed funds rate to end 2022 within the 2.5% - 2.75% range. It now hovers at 0.75% - 1%, following March's rate hike of 0.25% plus the 0.5% raise early this month.
Meanwhile, individuals trust a 50bp (0.50%) hike within the target range might be appropriate in the upcoming few meetings (according to the minutes). It also proposed a restrictive policy stance could be suitable conditional to the evolving economic conditions.
Fed raising rates more than expected would mean a struggle for cryptocurrencies since higher rates make investors quit risky assets as safer ones become more appealing.
Nevertheless, the latest remarks from the Street suggest Bitcoin could be ready to shift tides, a lucrative thing for other cryptos. Nikolaos Panigirtzoglou of JPMorgan Chase revealed Bitcoin's fair value at $38K, implying an enormous surge from BTC's current levels of around $29K. The analyst termed Bitcoin a preferred alternative asset.
On the other side, economic researcher Yves Lamoureux trusts BTC might rally to $100K by 2023-end. Keep in mind that Lamoureux cautioned clients on BTC's imminent crash in November 2021. The primary catalyst the expert considers in BTC miners' rewards reduced by 50%, trimming the total supply, a move that happens after four years, set to occur again in early 2024.
DOGE and SHIB seem to follow BTC like most crypto assets today. Though no one knows whether Lamoureux and JPMorgan are accurate, many trust Bitcoin will remain king in the digital finance world. Market participants can consider the asset for long-term investment. Nevertheless, Dogecoin and Shiba Inu will likely continue mimicking broad market reactions.