The impact of the Fed’s rate cut

Bitcoin price continues to fall $ 36,000. Most of the other altcoins fell along with Bitcoin. Not only crypto, but also the stock or gold market shows a similar decline. The financial markets also came under the influence of the news that the Fed will raise interest rates earlier at the end of 2022.

Following the announcement by Fed Chairman Jerome Powell, Fed Chairman James Pullard in St. Louis also agreed and reiterated the possibility of an early rate hike.

The percentage of votes in favor of a rate hike in 2022 and many want a higher rate hike in 2023. In the long term, most states want rates to stay between 2% and 3%. This is the proposed proposal that the Fed must base on the inflation rate and economic development.

Although the rate hike has been mentioned over the years, the impact of this information still leaves the Fed panicking and selling out with every announcement. However, this also helps to increase the US index. Dollar Index that strengthens the position of the USD against other major world currencies.

The Fed is in a very difficult decision-making situation. On the one hand, a rise in interest rates will slow the economy down in the short term and affect the financial market. If interest rates are not raised, inflation will continue to rise and the Fed cannot control it. Therefore, in order to make a decision, the Fed has to weigh very carefully.

In the short term, the Fed’s rate cuts will drive traditional financial markets as well as cryptocurrency down. In the long term, however, the crypto market remains an upward trend year after year.

China bans BTC mining in Sichuan Tứ

The next news comes from the BTC mining ban in China. The authorities of the city of Ya’an in the western province of Sichuan have ordered the closure of local Bitcoin mining operations for inspection.

With this announcement, 26 major mining sites were ordered to close for inspection. Although Sichuan is a huge hydropower producer, the mining guilds here also use as much electricity as natural electromagnetic energy.

Not only Sichuan but other regions like Yunnan, Xinjiang, Inner Mongolia and Qinghai have encountered a similar situation recently. The Chinese government started imposing the ban in the provinces.

In this situation, small mining pools that do not have sufficient operating costs or are relocating are selling BTC to reclaim their capital and selling miners to larger mining pools. And the big mining pools with good finances can move to places that accept Bitcoin and keep mining. Therefore, China’s ban on BTC mining could have an impact in the short term, but in the long run, BTC mining will gradually stabilize.