Expert Chomsky: the cryptocurrency market is dependent on the monetary policy of the world’s leading central banks
The events of this year have shown the dependence of the cryptocurrency market on the monetary policy of the world’s leading central banks, Aaron Chomsky, head of the ICB Fund investment department, told Izvestia.
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According to him, this was manifested in the increased correlation of bitcoin with the NASDAQ Composite index of high-tech companies, the pricing of shares of which is based, among other things, on the key rate of the Federal Reserve System (FRS).
“The first signals of the Fed about the transition to its increase contributed to the passage of the peak in the prices of cryptocurrencies. In the second quarter, when it became obvious that due to the acceleration of inflation, the tightening step could be 75-100 bps, rather than the standard 25 bps, and it would take more determination to win, bitcoin showed the worst dynamics over the past 11 years, as well as assets in traditional financial markets,” he said. him.
“The market fears that the economy will not withstand such treatment, deepening the recession, which will force the Fed to change its perceptions,” Chomsky said.
He called the possible destabilization of financial markets another potential trigger in the cryptocurrency market. Chomsky cited the example of Great Britain, where, due to the loss of confidence in the government’s fiscal policy, the collapse of the national currency and the debt market began, which eventually forced the Bank of England to intervene in the situation.
“Against the background of these events, bitcoin lost its link to the stock market, as investors in a panic converted the pound into digital assets (this also manifested itself in euros, but to a lesser extent, after the results of the elections in Italy). In other words, in this case, bitcoin behaved like a real “digital gold,” the analyst explained.
He stressed that the absence of changes in the policy of the central banks of the countries in the near future will keep the stress on the financial markets, leaving bitcoin in “limbo”.
“According to Morgan Stanley estimates, the monthly rate of reduction of the global money supply in the world in dollar terms has reached $750 billion. These are very significant figures that indicate the absence of prerequisites for a positive revaluation of any assets. Bitcoin can stand only in the case of new episodes, when it will be able to manifest itself as a digital embodiment of gold,” Chomsky added.
At the same time, in his opinion, changes in the paradigm of thinking of the Fed and other central banks should not be expected before the end of the year.
The day before, Igor Pan, a specialist in digital assets of the Finmir marketplace, told Izvestia that the cryptocurrency market could maintain the same high volatile dynamics in October as it was in September.