Expert Tells Investors To Be Careful In The Cryptocurrency Rally, Why’s That?
A crypto influencer, Alfonso Peccatiello, expressed his thoughts as
regards the recent cryptocurrency rally. He stated that the current
crypto rally is not a yardstick for investors to raise their hopes
too high. This was revealed following the increase in certain
digital currencies such as Bitcoin and Ethereum in the last 24
hours. A recent crypto market watch showed a 24-hour price
appreciation of Bitcoin of more than 9%. Currently, BTC trades at a
price of over $23,000. Meanwhile, Ethereum, the second largest
digital currency, has also experienced a rise in its price. Its 24
hours price increase got over 13%. Presently, the token trades at a
price above $1,600. The surge in the prices of these
cryptocurrencies followed the Fed’s decision to hike its interest
rate by about 75 bps. Alfonso’s Thoughts On The Current Rally A
renowned crypto expert and author of The Macro Compass, Alfonso
Peccatiello, gave his thoughts concerning the current crypto rally.
According to Peccatiello, the recent digital currency surge should
not be a reason for investors to be excited. He stated this,
backing it up with an explanation. Related Reading: Bitcoin
Makes Surprise Climb As Fed Discloses 0.75 Point Rate Bump
Peccatiello first admitted that the speech of the Fed chair, Jerome
Powell, triggered the rise in the prices of cryptocurrencies. But,
there is a need for his speech to be guided. He added that if his
speech lacks a backup, it will be a cause for alarm in the crypto
market. Furthermore, he uncovered his portfolio, stating that he
has little interest in risky assets. One of such risky assets is
digital currencies. Trigger For Cryptocurrency Rally Drawing from
Peccatiello’s speech, the increase in the prices of these digital
tokens commenced after Powell’s statement. He added that Powell
stated a relationship between inflation and neutral interest rates.
Powell also cited that the Fed’s operations will base more on data.
This results from the recent hikes of about 75 basis points.
According to Peccatiello, the Federal Reserve would be a dreadful
zone if it repeats its interest rate hike over time. Powell is more
careful now that the Fed feels they reached neutral rates: why?
Because every time the Fed hiked above that (restrictive policy) it
ended up breaking something. Every single time.
pic.twitter.com/OkQ51xzipB — Alf (@MacroAlf) July 28, 2022 Then,
Powell made another statement, which happens to be a good cause for
concern. He cited that there is another alarming increase that
could be the trigger for the next meeting of the FOMC, scheduled
for September. Related Reading | Why Cardano (ADA) May
Breakout In A Bull Run To $1 His final statement pointed to the
fate of digital currencies and their yields. He revealed that there
is a need for the Fed to carry out an aggressive tightening.
Peccatiello stated that this action is necessary to prevent the
decline of actual yields. Moreover, with reduced yields comes low
performance in the crypto market and other risk-driven assets.
Featured image from Pexels, chart from TradingView.com
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