• This week’s key events in the Bitcoin and crypto markets will be shaped by macro data, US banking crisis, and potential Fed rate hike.
• Joe Biden’s speech on the US banking crisis will be crucial to watch, as he could blame crypto for the collapse of banks.
• Goldman Sachs economists now expect a no rate hike at next FOMC meeting due to recent stress in banking sector.
Important Week Ahead For Bitcoin And Crypto Markets
The Bitcoin and crypto markets are once again facing an extremely important week, which will be shaped not only by macro data, but also by the brewing US banking crisis. While at the beginning of last week the odds of a Fed rate hike of 50 basis points at the next FOMC meeting on March 22 were skyrocketing, the situation has changed dramatically.
What To Look Out For In Biden’s Speech?
This Monday morning at 8:00 a.m. (EST), the financial world will be looking at US President Joe Biden’s speech on the US banking crisis. Of particular interest to the crypto industry will be whether the US President scapegoats crypto for the collapse of the banks. On the other hand, it will be crucial to watch whether Biden acknowledges that Silicon Valley Bank’s (SVB) problems stem from its parking $91 billion in deposits in long-dated securities such as mortgage bonds and U.S. Treasuries that were considered safe but are now worth $15 billion less after Federal Reserve aggressively raised interest rates.
Fed In A Tough Spot
In general, The Fed is in a tough spot: a hike could spread fear in markets of further defaults in financial sector while a no hike could send wrong signal and drive up risk assets, while 2% inflation target is still far off. In wake of past few days’ events only 55% now expect 25 basis point hike according to FedWatch Tool & 45% even project 0%.
Goldman Sachs’ Prediction
Goldman Sachs economist Jan Hatzius already said in Sunday note: “In light of stress in banking system, we no longer expect FOMC to deliver rate hike at its next meeting on March 22.” Just recently Goldman Sachs also confirmed this prediction saying tomorrow’s CPI print is now irrelevant due to recent bank stresses they observed.
The upcoming week promises to bring exciting developments both for Bitcoin and cryptocurrency markets as well as for global economic outlook more broadly speaking with Joe Biden’s speech being particularly important for market direction going forward depending if he blames or exonerates cryptocurrency from current banking woes or does something else altogether – only time will tell!