BUSINESS FINANCE : This Attitude Is What's Causing The Bitcoin Market To Slow Down Once More

Investors' reactions to the minutes from the Fed's most recent conference, which were made public on February 22, 2023, caused the cryptocurrency market to halt once more.

The Tokocrypto research team reports in their daily analysis that investors are still searching for hints about what to do next to address the shaky macroeconomic environment. The US equity market's performance slightly declined along with that of cryptocurrencies. 

Fed Minutes

The Fed's minutes' findings did not raise much optimism for a rise in the price of Bitcoin (BTC), which was seen to be still fluctuating between USD 24,500 and Rp. 371.9 million (assuming an exchange rate of Rp. 15,182 per US dollar).

Many investors had anticipated that the Fed would adopt a more dovish monetary policy at the meeting. But they must acknowledge that inflation and the possibility of a recession remain," the study team was quoted as saying on Thursday (23/2/2023).

The Fed minutes generally suggested that a rate increase might last longer than most investors had anticipated. An attempt to lower US inflation is being made through an increase in interest rates.

This was further supported by statistics from the US producer price index (PPI) for January, which unexpectedly increased by 0.7 percent, and the consumer price index (CPI), which showed higher-than-expected inflation (MoM). 

Stocks and the Bitcoin Market Continue to Correlate

The cryptocurrency market and US equity indices still have a strong correlation. The Federal Reserve confirmed in its minutes that it would keep increasing interest rates until inflation reached a stable level, even after January's CPI revealed inflation that was 0.5 percent higher than anticipated.

"In addition, investors' worries about legal measures against the cryptocurrency industry, particularly in the US, are a major contributing factor to today's decline. Investors continue to anticipate that the US Securities and Exchange Commission (SEC) will continue to tighten its enforcement of regulations "the study team stated. 

Other Reducing Elements

Another drawback is that investors continue to record profits as some cryptocurrencies, like Bitcoin, experience increases in their price performance. The desire of investors to wait for indicators that US inflation has peaked or for the Fed to announce that more gradual interest rate increases are on the horizon is still fading.