“Bitcoin (BTC) is trading higher a day after U.S. Federal Reserve Chair Jerome Powell signaled he’s prepared to raise interest rates more aggressively. Powell put a 50 basis point increase on the table for the coming months, having raised by 25 basis points last week.
1. Fed tightening is priced in
Before Russia invaded Ukraine, markets foresaw the Fed raising rates by 50 basis points in March. Now, traders are factoring in a 50 basis point hike in May. In other words, Powell’s hint of aggressive rate hikes is hardly surprising. If anything, last week’s hawkish Fed meeting and Powell’s comments on Monday confirmed investor expectations and appear to have removed a significant amount of uncertainty from the market.
Investors hate uncertainty more than they hate bad outcomes. The ‘storm before the calm’ had been brewing, and it looks like the storm has finally passed.
2. Recession concerns: a blessing in disguise
Forward-looking markets could be focusing on a recession and the prospect of the Fed returning to expansionary monetary policy to support the economy. According to the Fed Funds futures, interest-rate derivatives traders are pricing a rate cut as early as 2023.
The inversion of the curve signals to investors that the Fed may compromise in the future, so it’s a good sign in part. Once the economy is in trouble, the Fed can only turn back to the road of quantitative easing.”
“There’s a “significant risk” that overseas stashes of digital assets could undermine existing requirements to share details of foreign bank accounts, intended to stop tax evasion and illicit finance, the OECD said.
The proposals say crypto providers would have to share their users’ names, addresses, Social Security numbers and details of transactions both between crypto and fiat and between different kinds of digital assets. Exchanges would also have to check the tax residences of new users and would be given 12 months to figure that out for existing clients.
The rules would also apply to both offline “cold” wallets and hot ones, as well as to services like crypto ATMs. Potential new central bank digital currencies and other kinds of electronic money would be included under existing data-swapping rules, under the plans.
The OECD says it will complete the rules based on peoples’ comments and will update the G20 in October.”
“The legislation aims to put in place a two-year moratorium on the kind of crypto mining used to secure the Bitcoin network. The bill was put together under the auspices of the state’s Climate Leadership and Community Protection Act, which mandates that New York’s greenhouse gas emissions be cut by 85% by 2050, with net emissions being slashed to zero.
The legislation still requires passage by the entire New York State Assembly and the state’s Senate, and then would need to be signed into law by the governor.”
“El Salvador has postponed its planned $1 billion bitcoin bond offering due to unfavorable market conditions, Finance Minister Alejandro Zelaya said on Tuesday. The issuance could be postponed to as late as September, Zelaya told Reuters.
According to a report in the Financial Times, the bonds will not be issued by the government of El Salvador, but instead by state-owned thermal energy company La Geo. Further, Americans will not be eligible to buy the paper.”
“Sheila Warren, CEO of the Crypto Council for Innovation and former head of data, blockchain and digital assets at the World Economic Forum, said the Federal Reserve could make a “strong move” in preserving the dollar’s role by introducing a central bank digital currency with wholesale use cases.
American exceptionalism is not something we can cling to anymore — not with the rise of what’s happening in Asia, Africa and around the globe. Innovation is going to flow to where it can thrive the most, and actively trying to block it is going to encourage it to head elsewhere.
These things are going to get built. The question is where do we want them to be geographically located and under what legal, regulatory, and sociocultural systems.”
“Now valued at $4 billion, the company will use the funds to build out its NFT-based metaverse. Metaverse investor Animoca Brands, which made its play-to-earn Benji Bananas game ApeCoin-compatible on March 17, also participated in the round.
Yuga Labs says it plans to use the new funding to build out an NFT-based, ApeCoin-powered gaming metaverse called Otherside.“
“Rep. Sessions today tweeted, ‘Bitcoin mining will play a critical role in rebuilding energy independence in the USA.‘
Sessions is far from the only Texas politician to hail Bitcoin. Senator Ted Cruz has been increasingly aligning himself with cryptocurrency, while Governor Greg Abbott sees Bitcoin mining as a way to stabilize the state’s largely deregulated power grid.
Texas now has the perfect opportunity to hone its sales pitch beyond the Bitcoin mining firms it’s been courting to a larger public that is still forming an opinion on cryptocurrency. In this line of thinking, there’s no need to worry about the consequences of sanctioning Russia if the U.S. doesn’t need the energy it provides.”