The Federal Reserve of the United States increased the interest rate by 0.25% points. There were no surprises. In other words, everything went as expected. Therefore, the response of the markets was quite positive. Of course, the Fed was somewhat more aggressive in tone. However, this did not discourage investors. Everything indicates that we will have at least 7 more increases this year. Many analysts expected 5 raises. But now this number seems to be too conservative.
We must remember that the markets have been preparing for this event since November of last year. Prices have been adjusting to the new paradigm for several months. The necessary corrections have taken place before. Investors always anticipate events of this type. The practice is to act before the event and not when it is already too late. In the world of investments, the anticipation of the event is often more important than the event itself. To the untrained eye, this week’s rally may seem contradictory and confusing. However, for the veterans, it is a well-known story.
Certain. Now credit is a little more expensive and that will have an impact on demand. The goal here is to cool down the economy a bit to curb inflation. Yes. The Fed is getting pretty late on that curve. However, this is not the whole story. It is also important to highlight the strength of the economy and progress in the labor market. In other words, it is not entirely unreasonable, incredible as it may seem, to expect economic growthdespite new rates, inflation and war.
Bitcoin and cryptocurrencies have danced to the same beat as the S&P 500 for the week. Lots of mixed signals. Lots of volatility. There is a somewhat strange atmosphere. But we cannot say that this is pessimism. I’d say it’s a mix of caution, skepticism, and optimism. The market, in a sense, has become more dovish and cautious.
Now, let’s talk, with a critical eye, about the most popular crypto news of the week.
Tax specialists remind that cryptocurrencies in Spain must be included in the income statement
It’s one thing to be a libertarian. And it is quite another to evade taxes. It is true that the code circulates in a decentralized network. Let’s say it’s a kind of independent citizen currency in a different lane than traditional banking. But the law is the law. In many jurisdictions, it is mandatory to file a tax return that includes all of our assets.. Of course, it is not always pleasant when the treasury takes our money. But I am afraid that ideology is no excuse for the authorities. Whether we like it or not, we have to pay taxes.
China tightens measures against digital currencies: up to 10 years in prison for any cryptocurrency exchange
The China of today is not the same as the China of 20 years ago. Xi Jinping has increased his control over the Party. The Party has increased its control over the state. And the state has increased its control over society. The financial sector, in particular, has become a priority. Now the color of the cat matters. The tightening of measures against cryptocurrencies in China is, of course, not an isolated event. It is part of a general trend towards a more planned economy. The State supports only what it contradicts. And it represses what it cannot fully control.
CBDCs Won’t Affect Private Stablecoin Market, Says Tether CTO
Certainly, CBDCs do not necessarily imply a significant substantive change. Of course it all depends on the project itself. However, from what we know so far, we would be talking about superficial changes. In other words, it is generally the same electronic fiat money as today, but made more efficient due to blockchain technology. The user, in fact, will not take much of the difference. Ultimately, it will remain the same fiat money controlled by the state.
We could assume that in a first stage the changes will not be particularly dramatic. In any case, the changes will take place behind the scenes. In other words, the algorithms will be different. But the user will not feel a major change. The matter is that technology allows the state to have more control. And I highly doubt they could resist that temptation for long. Will users have a direct account with the central bank? What, then, will be the role of banks?
Tether is a private project. It is a cryptocurrency anchored to the dollar. It is a representation of the dollar, but it is not the dollar. That means it’s not subject to the same controls as traditional banking. Which means an advantage in many aspects. In theory, we could say that CBDCs will not affect Tether. But we cannot claim victory. Because regulators have their eye on Tether. You don’t have to be a genius to know that private stablecoins will be subject to much stricter regulation in the future.
Instagram will soon add NFTs according to Mark Zuckerberg
There is always a trend in this space. There is a revolution going on all the time. But people tend to exaggerate and show a world that will never exist. The madness in the early stages is rarely what we see in the later stages. In other words, the NFT universe is not just the same monkey dressed in different ways. That universe gives for much more. I refuse to think that everything is reduced to a series of collectibles of questionable quality. How much artistic merit is there in trendy NFTs?
NFT technology represents a great opportunity for content creators. Therein lies the real revolution. The arrival of NFTs on Instagram can be a start on this path.
Gold-Backed Cryptocurrencies Shine in 2022: Market Cap Hits $1 Billion for the First Time
It is common to fall into the temptation of seeing the world as a battlefield. That is, Bitcoin against the dollar. Bitcoin against gold. Bitcoin against altcoins. On a narrative level, it is always easier to promote the new by attacking the old. Apparently, there is a hegemony and the plan is to replace that hegemony with a new one. After all, new technologies do away with the old. The car killed the bike. TV with radio. The Coca-C with the orange game. And so the story goes. The new replaces the old.
Really? What actually happens is a greater plurality of options. The world is not a battlefield between hegemonies. The world is a variety market. Of course I’m not at all surprised that gold-backed cryptocurrencies are shining in 2022. The world loves diversity.
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