Will the Fed Raise Another 0.75? Crypto Thoughts and Investment Arguments

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2022-10-06 22:58:43

Investors worried about inflation

Last Friday, US stocks closed slightly green. For the whole week, however, the Dow closed down 0.2%, the S&P 500 fell 0.9% and the Nasdaq fell 1.6%. The announced CPI data continues to increase, causing investor fears of a recession to heighten among investors.

In the next week, information about unemployment declaration is also expected and will also affect the decision of the Fed. Many people think that the Fed can raise interest rates from 0.75% and even 1%.

China’s economy is also facing difficulties and growth has not met expectations. China’s GDP grew by 0.4% in the second quarter, while the first quarter grew by 4.8% year-on-year. This growth was still lower than the 1% expected by analysts in a Reuters poll. China continues to be affected by strict Covid control measures.

Money is leaving the US stock market and investors are holding on to cash a lot. Investors are also worried by the financial recession, so they are holding cash to find safe assets. Some investors are eager to put their money into government bond ETFs. Although the bond interest rate is not high, it is still safer and better than holding cash.

When inflation started to decrease and the Fed stopped raising interest rates, it was also the time when investors’ money rushed into the market.

Crypto Market

Bitcoin yesterday still held around $ 20,000. ETH has outperformed BTC over the weekend as ETH’s The Merge update is scheduled for next September. The third and final testnet, Goerli, will be activated in August. As planned, the difficulty bomb will also be activated in August. This will increase the difficulty of mining to make the miners give up. and gradually moved to the PoS stake network.

After filing for bankruptcy, Celsius had total assets of $4.3 billion and total liabilities of up to $5.5 billion, or a deficit of $1.2 billion. Recently, this company said that it wants to mine Bitcoin to compensate creditors and fill the deficit. The Celsius Mining division is estimated to mine 15,000 BTC in 2023 (equivalent to $310 million at current prices). However, the estimated number of BTC mined is very high compared to the fact that professional mining companies have done. According to data from the company Marathon Digital Holding, they have only mined 3,197 BTC within the past year. Therefore, Celsius’s estimated BTC mined number also raises questions for investors.

Investment bank JPMorgan estimates that the production cost to mine one Bitcoin has dropped from $24,000 in early June to just $13,000. This mining cost estimate is reduced because there are new excavators for better mining efficiency and reduced electricity consumption. The decrease in mining speed causes the difficulty of mining to decrease, leading to a decrease in the mining cost. With Celsius now, there will be two options: selling assets or looking for investors to continue mining to pay off debt.

Argument on long-term investment

In the short term, the Bitcoin price has fluctuated greatly over the years. But looking at the long-term view of more than 10 years of development, the price of BTC is still going in the direction of big growth year by year. When investing in BTC or any other asset, investors need to have their own investment arguments to orient and have a suitable investment strategy. This is also the basis and belief for investors to overcome difficulties when the market is not good or does not follow their predictions.

Like El Savador accept BTC and average price investment in BTC. Despite the bear market, the country’s President Bukele remains steadfast in his belief that BTC is the future and cannot be otherwise. So, no matter how much criticism, difficulties they still firmly believe in the long-term future as well as their acceptance and investment of BTC.

Investment arguments, especially long-term investments, need a long-term vision and belief in that asset. Time will prove and show us unexpected changes. Many thoughts were thought to be crazy before but then we have gps navigation, internet, email, youtube, e-commerce like today. When you believe in a future that others don’t, that’s your chance.

So far, inflation has always existed. It is essential to promote economic development when managed properly. However, in the long term, inflation affects negatively and causes fiat currency to depreciate more and more. That’s why it’s important to store money in stores of value for long-term growth.

Thuan still believes and chooses BTC as a store of value. At the same time, Thuan also believes in the future development of BTC and has averaged the price over the years. The capitalization of BTC as well as the crypto market is still very small compared to other markets such as gold, silver, stocks, etc. Therefore, the growth potential of BTC, ETH as well as crypto is still very large.

A simple and easy-to-follow strategy with Thuan over the years is averaging the long-term price of BTC as well as a handful of altcoins in the top five. Aside from belief and argument, long-term investing requires a steady income in order to keep up. price average. This is the cash flow to ensure life as well as the capital flow to invest. We need to allocate capital properly for ourselves.

Above are the sharing of Thuan. Wish you have confidence and have a suitable investment strategy for you!

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