Bitcoin (BTC) surged profits to nearly $45,000 on March 1 as interest rate speculators cut their rates due to a sharp rate hike in 2022 and the number of whale addresses surged amid rumors that BTC has established itself as an apolitical safe haven . .
Traders cut rates by half a point for the month of March
The price of BTC surged more than 4% to nearly $45,000, a day after it registered its biggest one-day gain since February 2021 as a wave of sanctions against Russia, including a blocking of access to the SWIFT global banking system, raised concerns over about influence. . on global growth and inflation.
For example, the swap agreements associated with the Fed meeting in mid-March called for a tightening of 24.5 basis points from March 1, 2022. – less likely. . happen.
US Futures Agreements – Federal Fund Efficiency Ratio. Source: Bloomberg.
Meanwhile, traders have also lowered their expectations for the number of rate hikes in 2022 to five from seven days, according to Bloomberg’s Lisa Abramovich, who shared the following chart.
Implicit overnight rate and number of additions/deductions. Source: Liza Abramovich
The reassessment of the Fed’s prospects arose due to the fact that investor demand for safe-haven assets, including US government bonds and gold, has risen sharply in recent days.
Bitcoin, which had previously lost more than half of its value due to fears of aggressive Fed rate hikes, also reacted with a sharp improvement in part due to reports that Russians bought the cryptocurrency to circumvent sanctions.
“Bitcoin has seen a significant bull run today as it appears to have regained its safe haven status as the conflict between Russia and Ukraine continues to escalate,” Walid Kodmani, an analyst at XTB Market, told Bloomberg.
Data provided by research firm CoinMetrics also showed an increase of at least 1,000 BTC in addresses, commonly considered “whales” in the industry. Their number jumped from 2127 on February 27 to 2266 on February 28.
Bitcoin addresses with a balance of more than 1K BTC. Source: CoinMetrics, Messari
Up to 25 bps or not Up to 25 bps
Atlanta Fed President Rafael Bostic called for a 25 basis point rate hike at a meeting of the Federal Open Market Committee in late February. However, he also said that higher-than-expected inflation figures could make him “consider a 50 basis point move in March.”
Related: Two important derivative calculations suggest that Bitcoin traders expect Bitcoin to hold $40,000.
But environmental goals analyst Nick argues that the Russian-Ukrainian crisis has put the Fed in a precarious position. He explained that while inflation is likely to remain higher due to higher oil prices, a sharp increase in interest rates in March could lead to a stock market crash.
“Inflation is so high that we can probably afford the stock market to drop to -20%,” he wrote.
“But less than that, they will have to tighten again or risk a bear market for several years […] This is clearly not good for Bitcoin.”
