Bitcoin (BTC) is the best asset to “mitigate the economic impact” of major interest rate announcements. Babel FinanceCryptographic financial services provider.
Created by Babel Finance analysts Robbie Liu and Yuanming Qiu, this report shows market reactions to various assets in three US interest rate announcements this year (May 4, March 16, and January 26). I came to a conclusion after seeing it. ..
According to the report, Bitcoin’s mitigation effect is superior to other digital assets such as Ethereum’s native ETH tokens, and BTC is also closely related to traditional assets such as the US S & P 500 stock index. Nevertheless, the effect was clear.
Overall, Bitcoin’s performance on the dates above demonstrates the ability of assets to “more mitigate the economic impact of financial events compared to the US stock market and ETH.”
As a possible explanation for this, the report pointed out the fact that a “significant percentage” of Bitcoin holders were always confident in the “story of valuable assets and inflation hedging” of assets.
As a result, the report states that the majority of Bitcoin holders choose to retain their assets even if other risk assets crash.
Interest rate announcements and impact on BTC:
In particular, since May 2020, there has been a mild reaction in the Bitcoin market, even though digital assets have “unprecedentedly” reflected the US stock market.
According to the report, the 30-day correlation reached nearly 0.8 on May 6, 2022. This is the highest correlation since July 2017.
According to the report, it is still unclear whether Bitcoin has reached the bottom of the current bear cycle in terms of what to expect in the future.
“Some analysts are looking for signs of the bottom of Bitcoin,” but the report “doesn’t answer whether’buying a dip’is now a good bet,” the author writes. ..
Instead of predicting the bottom of Bitcoin, the report says that even if prices go down and remain highly correlated with other risk assets, the valuable assets of digital assets are “not completely diminished.” Revealed.
“As always, the long-term story of Bitcoin is not easily spoiled by another price collapse. The’true believers’ are still built there,” the author concludes.
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