- Yahoo Finance reports that the value of cryptocurencies unexpectedly increased after the US Federal Reserve tightened monetary policy.
- A tough week for bitcoin, which fell below $ 50,000, caused it to rise more than 2% following Fed statements.
- According to other analysts, this is the result of the regulator’s statement leading to a sense of certainty.
Cryptocurrencies unexpectedly began to rise in value after the US Federal Reserve announced a tightening of financial policy, according to Yahoo Finance.
Cryptocurrencies generally benefit from loose monetary policy and its inflationary side effects (as investors try to hedge against inflation with cryptocurrencies), but now investors have put their trust in digital currencies despite the opposite trend.
Bitcoin, which had a tough week that caused it to fall below $ 50,000, rose more than 2% following Fed statements.
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Louis Lavalle, managing director of crypto investment company 3iQ Digital Assets US, believes that the rapid growth of cryptocurrency is associated with a huge number of new investors, especially companies that have acquired digital coins for the first time this year.
Other experts believe that this is due to the emergence of certainty after the statements of the regulator.
“ Market participants were preparing for the worst, and since this did not happen, investors are relieved and we are seeing a rise in stock and cryptocurrency prices,” said Bull and Bear Profits market analyst John Wolfenbarger.
What is Cryptocurrency?
A cryptocurrency, crypto-currency, or crypto is a collection of binary data which is designed to work as a medium of exchange. Individual coin ownership records are stored in a ledger, which is a computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. Cryptocurrencies are generally fiat currencies, as they are not backed by or convertible into a commodity. Some crypto schemes use validators to maintain the cryptocurrency. In a proof-of-stake model, owners put up their tokens as collateral. In return, they get authority over the token in proportion to the amount they stake. Generally, these token stakers get additional ownership in the token over time via network fees, newly minted tokens or other such reward mechanisms.