‘Worse Than 2008’ – A Huge Fed ‘Sledgehammer’ Coming For The Price Of Bitcoin, Ethereum And Crypto

Bitcoin, Ethereum and other major cryptocurrencies have suffered an almighty price crash this year, wiping about $2 trillion from the combined crypto market, the Biden administration warned traders.

Subscribe Now to Forbes CryptoAsset & Blockchain Advisor and successfully navigate the volatile bitcoin and crypto market

The price of bitcoin, down 70% from its all-time high at the end of last year, has repeatedly failed to rise above $20,000 per bitcoin, while the price of Ethereum crashed after a stern warning from the chairman of the US Securities and Exchange Commission (SEC) Gary Gensler.

– Commercial break –

Now the bitcoin, ethereum and crypto market is poised for the Federal Reserve to unleash a “sledgehammer” that could drive prices up (though some still hope for a turnaround) in its ongoing war against stubbornly high inflation – with an analyst predicting the impact of the Great Financial Crisis of 2008 could be worse.

Do you want to stay ahead of the market and understand the latest crypto news? Register now for free CryptoCodexA daily newsletter for traders, investors and crypto curious

“We need to look at the big macro picture and what has put cryptos under pressure this year and that is the hammer of the Fed,” said Mike McGlone, senior commodities analyst at Bloomberg Intelligence. kitko.

The Fed, led by Chairman Jerome Powell, has embarked on a program of historic rate hikes this year as it grapples with runaway inflation that has hit a 40-year high.

Last week’s August inflation report showed that prices continued to rise higher than expected, possibly forcing the Fed to make another major rate hike at its meeting this week. The Fed’s Federal Open Market Committee will announce its latest decision on Wednesday, with markets forecasting a 75 basis point hike that would push interest rates above 4%, a level not seen since 2008.

Bitcoin, Ethereum, other major cryptocurrencies and stock markets have been hit hard this year by the Fed’s monetary tightening mission designed to suck liquidity out of the system, with technology stocks booming and crypto leading markets falling.

“There is a new wave of turmoil in financial markets amid fears that inflation will still prove to be a formidable foe,” senior investment and market analyst Susannah Streeter told Hargreaves Lansdown by email.

“Les actifs cryptographiques sont toujours étroitement liés à la fortune des marchés boursiers et étant donné qu’ils sont considérés comme des actifs très risqués, il ya eu une fuite du crypto Wild Westleurss al-redroits que les investtisseurs .”

The Fed and other central banks have pumped liquidity into the financial system during the Covid-19 pandemic, pushing prices up across the board, and if the Fed’s rate hikes trigger a recession and market collapse, McGlone fears that it is no longer dry. powder.

“I think it will be worse than the 2008 correction, worse than the Great Financial Crisis,” McGlone said, adding, “The Fed started easing in 2007 and then added massive liquidity. They can’t do that anymore.”

Register now for CryptoCodex—A free daily newsletter for the crypto-curious

MORE FORBES‘One Domino Falls’ Crypto Supports $10 Trillion Earthquake As Price Of Bitcoin, Ethereum, BNB, XRP, Solana, Cardano And Dogecoin Swing

However, McGlone predicted that bitcoin price could return to a new all-time high of $100,000 by 2025 and remains optimistic about Ethereum in the long run, highlighting the potential for institutional adoption.

For now, the price of bitcoin has fallen to recent lows of just under $20,000 in the past week, with some fearing another dip is imminent.

“Despite a pause in sales, the technical balance of power is on the bears side, with the potential to renew the June lows and move into the $12,000-14,000 per bitcoin region,” Alex said. Kuptsikevich, senior market analyst at FxPro, says in the email comments.

Leave a Comment