Coin Bureau host warns that crypto markets could crash further during “unique” economic turmoil
A widely followed crypto guru analyzes the potential consequences of the latest US inflation data for June.
In a new video, the pseudonymous Coin Bureau host Guy tells his 71,400 subscribers that last month’s inflation figures shock the markets.
«Wow. 9.1%. That was the US inflation figure we received yesterday for June, and it is safe to say that it surprised the market.
The figure for May was 8.6% and the expectation for yesterday’s announcement was 8.8%. Not many said 9%, but the numbers continue to rise. “
Guy explains that the new data means that US inflation is four decades high.
After suggesting that these high inflation figures may not even reveal the full extent of the unrest, Guy dives into the immediate effects of the news.
“With the immediate release of these figures, the markets fell. It’s because they know what’s around the corner – more aggressive interest rate hikes.
Before the release of yesterday’s inflation figures, the markets priced an increase of 50 to 75 basis points when the Fed meets later this month – that figure has now also risen.
The Fed’s monitoring tool, which uses interest rate futures, has a 75% probability of a 100 basis point increase in the next Fed meeting.
A whole percent. It may not sound like much to anyone, but believe me, it is …
[A 100 basis point hike] looks increasingly likely. ”
The pseudonymous cryptanalyst explains that the Fed is far from the only organization making such a move internationally – Canada announced a 100 basis point rate hike yesterday and the Bank of England recently announced a 25 basis point increase.
Base points are economic terms that refer to changes in interest rates – one basis point corresponds to 1/100 of a percent. As many as one hundred basis points will change the interest rate by one percent.
Guy then discusses the possible effects of the data on the crypto markets.
“In terms of the impact on the markets, it seems that the crypto markets have recovered from the first dump. It also appears that the market has now priced in that figure of 100 basis points, at least, interest rate futures.
If we actually see an increase of 100 basis points, I think it can still lead to a crash in the market. This is because it is still a rather unique feature and signals the full severity of the economic maelstrom we are in.
It may turn out that the growth picture is smaller than rosy, and the Fed then decides to go easy on the markets. If it is less than expected, this could prove to be a boon for the markets, at least temporarily.
But in the short to medium term, I still see so much headwinds … The crypto markets themselves also have unique challenges that pull us down. For example, in addition to Voyager’s bankruptcy yesterday, Celsius finally got into Chapter 11. There will probably be a lot of fallout from this that will be felt by everyone. Then of course you have the Three Arrows Capital saga, which seems to be even more controversial with each passing day. “
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