How the FOMC affects Bitcoin market.

palle11

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Quote from: Ben Barubal on May 09, 2023, 02:09:19 AM

Most people here in this field of business know that Bitcoin is not a regulated type that some people think it is. It is not controlled by any central authority. So no matter what is done and comes out as a result, Bitcoin will not be affected, because the number one thing that will be hit by the FOMC is the bank institutions that are held by the government.

And this happened because of inflation problems, so bitcoin has nothing to do with this kind of situation of course. But it can be positive in the increase of Bitcoin a few weeks from now, because the effect that the Fed has done will only be felt probably after 2-3 weeks I think.

I think your view is part of what I believe to be the effect of FOMC. This is not a btc or cryptocurrency regulatory agency but they are related to policy of government on currency which affects the interest rate. The outcome of such decision will not have direct effect to bitcoin because it is decentralized but it could have gradual effect based on the power of investors who could take investment decision based on the liquidity available on high or low interest rate. Such excesses or decrease is what may influence investment in crypto.

nesty

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The Federal Open Market Committee (FOMC) is responsible for the setting of monetary policy in the United States, which affects the Bitcoin market and other various financial market evolves. Changes of interest rates or other policy on monetary are decisions made by the Federal Open Market Committee can impact the value of US dollar, which also affects the price of bitcoin and other crypto currencies. It is important to know that the FOMC and the Bitcoin market are complex and can be influenced by different factors as well.

Ben Barubal

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Most people here in this field of business know that Bitcoin is not a regulated type that some people think it is. It is not controlled by any central authority. So no matter what is done and comes out as a result, Bitcoin will not be affected, because the number one thing that will be hit by the FOMC is the bank institutions that are held by the government.

And this happened because of inflation problems, so bitcoin has nothing to do with this kind of situation of course. But it can be positive in the increase of Bitcoin a few weeks from now, because the effect that the Fed has done will only be felt probably after 2-3 weeks I think.

kojektea

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I think this FOMO takes advantage of the volatility of a new investor in their psychological advantage. those who are easily carried away will surely follow this train . but they forget, when they get on the train that's when the driver will immediately jump in and leave them, I have seen this often and they do this often work for people who are just entering the investment world.

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How do you feel about the FOMC? An enigma that has baffled financial experts for decades. They may help the economy, but what are their plans? Unpredictable, causing ripple effects in the financial markets.

Consider Bitcoin, the most well-known crypto-currency alternative to fiat currency. When the Federal Open Market Committee raises interest rates, both fiat and crypto values fall, causing market pandemonium.

How does Bitcoin manage? Bitcoin is leading a frantic crypto-chase through the economic maze. Bitcoin has undeniable staying power and will battle to the very end, that much is certain.

meanwords

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Quote from: Cryptomultiplier on May 05, 2023, 11:19:14 AM

*How does Bitcoin adjust to the market after this kind of meeting and announcement by the FOMC affects interests rate of fiat and devalues it(Bitcoin) ?

It depends on the announcement of FOMC whether the interest goes down or increases. BTC price usually goes down when the interest goes higher and goes up when interest is lower. Although, I've noticed that it's generally for the short-term, and Bitcoin price either goes a little bit up or down or returns to its original price.

I know a community in my country that lives stream the price of Bitcoin, a few minutes before the announcement of FOMC. It was fun to watch the reaction of people because some would gamble their current month's salary to either win big or go home empty. Grin

robattfield

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Quote from: EarnOnVictor on May 06, 2023, 02:06:11 AM

Please note that Bitcoin can't function in isolation, the decentralization of the coin is not beyond its payment operations and benefits, it doesn't cover the market pricing and how it reacts to demand and supply during the bull and bear sentiments.
(...)

I agree with you on this, really, the general legal corridor for bitcoin issues on a national scale is not clear yet, so the global scale cannot imagine something independent of the possibility. that bitcoin offers. While it is fully acknowledged that bitcoin's ability to contribute to settlement of payments, or transactions, is very preeminent, it also acknowledges the fact that this crypto market is too small to make a big voice in the system. global financial system. The speculations about them are many and do not really meet the desires that many people, organizations and countries are aiming for, I believe we need a lot of time to find the real values. useful not only in the blockchain field but also in many other fields towards a global development environment.

Don Pedro Dinero

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Quote from: Cryptomultiplier on May 05, 2023, 11:19:14 AM

*How does Bitcoin adjust to the market after this kind of meeting and announcement by the FOMC affects interests rate of fiat and devalues it(Bitcoin) ?

Let's shed more light.
Let's discuss!

What the Fed does affects the economy in general and therefore also affects bitcoin, but the fact that the price of bitcoin has dropped by 1% after the announced quarter point hike may have nothing to do with it. A rise or fall of 1% is within the normal volatility of the bitcoin price, it is even low volatility.

Quote from: umbara ardian on May 06, 2023, 04:21:25 PM

Bitcoin's value is largely determined by the market forces of supply and demand, and external factors such as inflation and interest rates can have an impact on the value of the USD, which in turn can affect the value of Bitcoin when it is paired with the USD.

Bitcoin is not directly controlled by any central authority or institution, including the FOMC or the Federal Reserve. However, the USD is still the dominant currency in the world, and the value of Bitcoin is often expressed in USD terms, making it vulnerable to changes in the USD's value and other external factors that affect the USD.

Good point. I would also add that central bank policies affect the price but not only because of the bitcoin-fiat countervalue but also because if central banks flood the markets with money, much of that money will end up in financial assets such as bitcoin, and conversely, when there is tightening, it is normal for people to sell financial assets, such as bitcoin, to obtain liquidity, which in turn causes the price to fall.

adaseb

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It affects the market because it’s tied closely to stock market moves. When the fed rate is hinted as going higher in the near future due to inflation then risk on assets like stocks and crypto will go down. Same is true if it’s the opposite.

Last week you could of bought some 1 month government TBills and you would get almost 6%. This is risk free. So many people will sell their stocks which are risky and go for government bonds instead. Another reason is that people will have less money to spend to buy crypto and stocks and hence why it will go down.

Bitcoin and stocks will rally when they start to cut rates however. No idea when that will be.

hatshepsut93

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Quote from: Cryptomultiplier on May 05, 2023, 11:19:14 AM

Despite the decentralized nature of cryptocurrency, the FOMC which is the Federal Open Market committee is the agency responsible for dollar rates and other interest rate hike, under direction from the Feds. It also holds Bitcoin traders to ransom with this power it wields over the crypto in controlling the market to avoid inflation and crash of markets like what happened to FTX.

Saying that regulators control Bitcoin market is an overstatement. Their actions might influence it, but there's also a lot of other factors that cause price change, most notably halvenings. There's no entity in this world that can decide precisely what the Bitcoin price will be tomorrow, because Bitcoin's supply is distributed among millions of people and it is traded on a free and global market, and we are already at the point when most of coins have been mined. And both the network and software are not controlled by a single entity.

umbara ardian

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Bitcoin's value is largely determined by the market forces of supply and demand, and external factors such as inflation and interest rates can have an impact on the value of the USD, which in turn can affect the value of Bitcoin when it is paired with the USD.

Bitcoin is not directly controlled by any central authority or institution, including the FOMC or the Federal Reserve. However, the USD is still the dominant currency in the world, and the value of Bitcoin is often expressed in USD terms, making it vulnerable to changes in the USD's value and other external factors that affect the USD.

Cryptomultiplier

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Quote from: EarnOnVictor on May 06, 2023, 02:06:11 AM

Please note that Bitcoin can't function in isolation, the decentralization of the coin is not beyond its payment operations and benefits, it doesn't cover the market pricing and how it reacts to demand and supply during the bull and bear sentiments.

And decisively about your queries, external factors affect it because Bitcoin is paired with the USD to establish the price ($29,400, for example), and this is the most valuable paired price reference by any individual and financial institution all over the world which makes it powerfully.

Anything that is happening in the US would definitely be having an impact on the USD, and in turn, be impacting the value of the Bitcoin whether it's positive or negative. So inflation and interest rates are not an exception. And as you know, FED is powerful in making measures that affect those mentioned factors, their decisions will always affect the price of Bitcoin, unless it's no more paired with the USD.

It is no wonder Bitcoin still remains relevant because the value is paired to legal tender which has good value worldwide, except for those countries in Asia that have dropped the USD for Yen.
The fed decision as I believe is to keep financial structure intact, to avoid inflation of prices and commerce and also to maintain the value of the USD in the world market.

hugeblack

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The assumptions on which this issue is based are urgent. The markets take some time to interact with the news, and we definitely have to wait until the week closes on Sunday to see the impact of the Fed's decisions on prices. The confirmed information so far is that raising the interest rate by 25 basis points has been included in the current rate, but trends that there will be no further interest rate hike is what we will see its impact in the coming days.

The continuation of the current bullish wave may end with a price above 35,000 before the end of this month.

gaston castano

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In terms of Bitcoin specifically, its price can be influenced by a range of factors, including changes in investor sentiment, adoption by mainstream businesses and investors, and government regulations. While the FOMC's policies and announcements can have an impact on the broader financial markets and investor sentiment, it is unclear how much of an impact they have specifically on Bitcoin's price and value.

EarnOnVictor

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Quote from: Cryptomultiplier on May 05, 2023, 11:19:14 AM

*Is same effect of FOMC policy felt on other crypto currencies, alt coins including stocks and shares, around the world?

*How does Bitcoin adjust to the market after this kind of meeting and announcement by the FOMC affects interests rate of fiat and devalues it(Bitcoin) ?

Let's shed more light.

Please note that Bitcoin can't function in isolation, the decentralization of the coin is not beyond its payment operations and benefits, it doesn't cover the market pricing and how it reacts to demand and supply during the bull and bear sentiments.

And decisively about your queries, external factors affect it because Bitcoin is paired with the USD to establish the price ($29,400, for example), and this is the most valuable paired price reference by any individual and financial institution all over the world which makes it powerfully.

Anything that is happening in the US would definitely be having an impact on the USD, and in turn, be impacting the value of Bitcoin whether it's positive or negative. So inflation and interest rates are not an exception. Also as you know, the FED is powerful in making measures that affect those mentioned factors, their decisions will always affect the price of Bitcoin regardless, unless it's no longer paired with the USD which is the major BTC-paired fiat currency.

Cryptomultiplier

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Quote

The Fed, through the FOMC or Federal Open Market Committee, adjusts rates depending on the economy's needs.
1. If the FOMC believes the economy is growing too quickly, and it's likely that inflation or rising prices might occur, the FOMC will increase the fed funds rate.

2. Markets
Bitcoin Falls Slightly After Fed Rate Hike.
BTC was down about 1% after the U.S. central bank boosted the federal funds rate by 25 basis points. Fed Chair Jerome Powell noted the central bank had omitted language signaling additional rate hikes at upcoming meetings.
By Jocelyn Yang

https://www.coindesk.com/markets/2023/05/03/bitcoin-falls-slightly-after-fed-rate-hike/

Quote

Bitcoin’s (BTC) price dropped slightly to below $28,500 after the U.S. Federal Reserve did what was widely expected and raised interest rates by 25 basis points (bps). The increase sends the federal funds rate to a target range of between 5% and 5.25%.
The largest cryptocurrency by market capitalization was recently trading at around $28,350, down about a percentage point over the past 24 hours, according to CoinDesk data.

Despite the decentralized nature of cryptocurrency, the FOMC which is the Federal Open Market committee is the agency responsible for dollar rates and other interest rate hike, under direction from the Feds. It also holds Bitcoin traders to ransom with this power it wields over the crypto in controlling the market to avoid inflation and crash of markets like what happened to FTX.
The dollar, USD, is a dominant value in the market and with Bitcoin being a strong competition, it is a no wonder it pends to become legal tender in the U.S.
This is also a how to control inflation and hike of prices of commodities and service too, which is what FOMC stands to adjust after its announcement.
When there is an increase of the interest rate, the value of fiat money is reduced. This will mean a decline in any crypto market investment as well.

*Is same effect of FOMC policy felt on other crypto currencies, alt coins including stocks and shares, around the world?

*How does Bitcoin adjust to the market after this kind of meeting and announcement by the FOMC affects interests rate of fiat and devalues it(Bitcoin) ?

Let's shed more light.
Let's discuss!

Topic: How the FOMC affects Bitcoin market. (Read 152 times)