Madrid. Bitcoin plummeted by more than 8% on Monday, in line with the world’s major stock market indices, due to doubts about the US economy and technology companies after the main companies recently published results.
In this way, the crypto asset par excellence fell by 7.37% today, to $54,334.3, at around 7:00 p.m. Spanish peninsular time. However, it has fallen by more than 10%.
The latest incoming data on the US macroeconomic health, such as rising weekly jobless claims and the unemployment rate, have led investors to believe that the Federal Reserve (Fed) may have been too slow in cutting interest rates and that the economy could now face a ‘hard landing’.
The rise in the price of money ordered by the Bank of Japan is also said to be weighing on the markets, as are the results of technology stocks.
“Major stock indices and futures fell sharply towards the weekend, driven by growing fears of a recession. These fears were heightened by the publication of the US employment report on Friday, which increased concerns about the strength of economic growth. In addition, continued geopolitical tensions have contributed to uncertainty and instability,” explained Javier García de la Torre, head of Binance in Spain and Portugal.
“Talking about cryptocurrencies specifically, the widespread market downturn triggered by recession fears has led to the reallocation of capital away from riskier assets, with digital currencies still largely perceived as such,” he added.
The analyst has indicated that the Fed is expected to lower rates in September, which “should improve the outlook for the US economy.” In any case, he has warned of “potential fluctuations” in the stock market given the relative distance from the presidential elections in November, which will be contested between Kamala Harris and Donald Trump.
Possibilities of cuts
The CME tool, which measures the possibility of interest rate changes based on the prices of 30-day federal funds futures, shows a 98.50% probability that the Fed will opt for a 50 basis point cut in September, which would put rates in a range of 4.75% to 5%. On the other hand, the remaining 1.5% would bet on a quarter percentage point cut, to 5% and 5.25%.
The abrupt change in positions can be seen when we see that last Friday, when the employment data for July was published, the probability of a half-point drop for September rose to 74%, while at the end of July it was only 11.4% and 6.6% in the middle of the month.
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– 2024-08-08 19:18:04
