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A New Currency Crisis is Coming

Recent gains in DXY reflect unfavorable sentiment surrounding cryptocurrencies

By EstalontechPublished about a year ago Updated about a year ago 6 min read
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Bitcoins have received a lot of acclaim for the potential they have to act as both a hedge against inflation and a store of wealth.

How closely do the ever-rising price of cryptocurrencies and the pace of inflation overlap?

The term “inflation” refers to the gradual erosion of purchasing power experienced by a currency over time, in this case the United States dollar.

The result of this is an increase in the average cost of goods and services over time, which in turn contributes to the expansion of the economy. However, unlike to fiat currencies, cryptocurrencies, according to their proponents’ assertions, are not susceptible to the same degree of manipulation that may be brought about by fluctuations in interest rates.

Both Bitcoin and Ether experienced significant price gains at the beginning of the month of May, with Bitcoin experiencing a rise of over 3.5% and Ether experiencing an increase of approximately 1.2%. The skyrocketing rate of inflation has been one factor that has contributed to the widespread reductions seen on the cryptocurrency markets ,and the US has started QT , the global currency market has been volatile and has evolved to a stage where the global reaction to a stronger Dollars, seems to bound to have a drastic change, a change that even the Feds may find it unbearable

Following the announcement of the increase in interest rates, there was a momentary jump in the price of cryptocurrencies; nevertheless, the gains that were made were not able to be maintained over time.

However, many market observers continue to believe that cryptocurrencies have behaved similarly to stocks for a while , much like a significant technology stock, despite the fact that equities almost always react unfavorably to the USD. This is despite the fact that equities almost always react negatively to the USD, but as the USD get stronger, things are bound to change due to other country’s reaction and counter offensive action

Recent gains in DXY reflect unfavorable sentiment surrounding cryptocurrencies, but the Federal Reserve’s interest rate hike has caused the USD to rise across the board, putting pressure on currencies including the yen, the yuan, the euro, and the pound.

Recent gains in DXY reflect unfavorable sentiment surrounding cryptocurrencies. Japan, China, and the United Kingdom have all recently begun printing enormous sums of money in an effort to restore equilibrium in their respective economies.

If the Federal Reserve begins to come under significant pressure from the United Kingdom, which has been working against the United States by enacting a tax cut, it is possible that there will be a short pivot and a pause on quantitative tightening.

This it seems will notice a drastic change for the coming quater , because all of these reactions will be occurring in October till December . Due to the fact that all of these reactions took place in the month of October, the reaction and statement of a probable short pivot and stop in quantitative tightening could be right around the corner.

If the Feds do not make a course correction, the entire world will experience a possible repeat of the Asian Currency Crisis that occurred in 1998. During that crisis, the thai baht was devalued, and investors began pulling their money out of the Asean region.

This caused all of the countries with different currencies to enter a depreciation domino factor that collapsed all of the Asian region. In this round, the USD will highly possibly cause depreciation to currencies in Europe, Asia Pacific ,middle east even Canada , Brasil , Taiwan ,Thailand , Vietnam and Malaysia .

As the Feds react , they are calling for a meeting on coming Monday ,and this meeting will likely discuss on the effect felt from UK , China and Japanese who have already starting taking action to printing more money , while the Rubble sanction seems not to affecting and it is possible there will be some market reaction as the meeting involve Powell

If the feds do not change course, at least half the world economies will go into recession within starting from the next quater into June 2023 and the Democrats will highly meet with a bad loss in the Mid November election, where the world will face a US white elephant administration coming up in Dec 2022 and many recent proposal budgets and commitments will be dumped, causing further crash to the US Dollar itself within early 2023

Investors in cryptocurrencies are not out of the woods simply because the market is experiencing a bear market. In reality, they may provide an excellent opportunity to purchase tokens at a discount, which will be worth significantly more if the market rebounds.

If you want to make money in a bear market, you must resist the desire to panic as prices continue to plummet. Then only will you be able to generate income. Only after performing these measures will you be able to create a profit in a bad market. You should redirect your attention away from short-term concerns and instead concentrate on growing the size of your investment portfolio over the long term.

This market will continue to decline until market makers deem it necessary to persuade you to sell your position and abandon the horse.

Similarly to how other markets function, instead of focusing on precise price levels, you should focus on market mood.

My observations indicate that maintaining momentum is the most essential factor and react as and when necessary .

#Disclaimer Note : This publication is not intended for use as a source of any financial , money making legal, medical or accounting advice. The information contained in this guide may be subject to laws in the United States and other jurisdictions. We suggest carefully reading the necessary terms of the services/products used before applying it to any activity which is, or may be, regulated. We do not assume any responsibility for what you choose to do with this information. This article is not meant for financial advice , Use with your own judgment.

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About the Creator

Estalontech

Estalontech is an Indie publisher with over 400 Book titles on Amazon KDP. Being a Publisher , it is normal for us to co author and brainstorm on interesting contents for this publication which we will like to share on this platform

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