Crypto Better Days Coming: UN urges Federal Reserve not to raise interest rates
Crypto prices plummeted immediately after Federal Reserve Chairman Jerome Powell announced they were raising interest rates during an economic summit on September 21.
Now, in a not-so-belated reaction, the UN is asking the US central bank and other major Western regulators not to continue raising interest rates, a UN agency says.
The Fed and other central banks around the world raised their interest rates with the aim of containing the onslaught of inflation. However, the UN Conference on Trade and Development (UNCTAD) warns that this could trigger a worldwide economic crisis.
JUST IN: The UN says the FED and other central banks risk pushing the global economy into recession if they continue to raise interest rates.
— Watcher.Guru (@WatcherGuru) 3 October 2022
Better days ahead for crypto?
UNCTAD published its 2022 Trade and Development Report on Monday, in which it expressed concern about the possibility of a global economic catastrophe caused by the Fed’s rigid monetary policy, the effects of which would be felt most in developing countries.
“Any belief that they (central banks) will be able to bring down rates by relying on higher interest rates without generating a recession is … a reckless gamble,” the agency said.
The market immediately reacted negatively to Powell’s reiteration that the Fed must continue its fight against rising inflation by raising interest rates further.
As has been the case in recent months as the prices of Bitcoin and Ether have become increasingly tied to the stock market, the price of Bitcoin and the larger crypto market followed suit.
Current Fed policies are harming vulnerable people globally
“Current policies are harmful to vulnerable populations everywhere, especially in developing countries. Rebeca Grynspan, UNCTAD’s Secretary-General, made these remarks at a press conference in Geneva.
Market analysts at Bitfinex, a cryptocurrency exchange headquartered in the British Virgin Islands, have issued the following statements via email:
“The cryptocurrency market, like other risk assets, is extremely sensitive to comments from the Federal Reserve and has recently been affected by the Fed’s interest rate hikes.”
At the time of writing, Bitcoin is trading at $19,603, up 3 percent over the past seven days, data from Coingecko showed on Tuesday.
Will A Recession Benefit Crypto?
Meanwhile, predictions about how cryptocurrency prices will behave during a recession are all over the map. While the consensus is that the value of cryptoassets will plummet in the event of a stock market crash, an opposing viewpoint is gaining ground.
A recession, which US investor Stan Druckenmiller believes will happen next year, will be good for the cryptocurrency sector as a whole, he says.
Druckenmiller pointed out that a growing lack of trust in governments and their central banks could be good news for cryptocurrencies. Because Bitcoin is decentralized, market watchers believe it is likely to diverge from the pack and increase in price.
Some analysts believe that when Bitcoin rises — whether the Fed raises interest rates or not — other major cryptos like Ethereum, Tether, and Dogecoin will too.
An easing of the Fed’s current stance on interest rates could have a healing effect on the overall health of the crypto markets.
When the Federal Reserve meets again on November 4, they will decide whether interest rates should be allowed to rise again. And when the UN is now breathing heavily down its neck, the Fed must get back to the drawing board and map out its next move.
BTC total market cap at $376 billion on the daily chart | Source: TradingView.com Featured image from BGR, chart from TradingView.com
