Worried about inflation and rising interest rates, the crypto market fell again
The ISM non Manufacturing Purchasing Managers' index (PMI) of the US Supply Management Association in August was better than expected and hit a four month high. US service industry activity gained momentum in August, which indicated to investors that Fed officials may continue to sharply raise interest rates by 75 basis points on September 21. In addition, it is expected that most central banks around the world will follow the Federal Reserve in raising interest rates substantially. Fundamental indicators and market expectations led to another decline in the crypto market.
The purchasing manager index is an index summarized through monthly surveys of purchasing managers, which can reflect the changing trend of the economy. It covers production and circulation, manufacturing and non manufacturing, and is divided into manufacturing PMI and service PMI. Some countries have also established construction PMI. The American Institute of supply management reported that the non Manufacturing Purchasing Managers' index rose to 56.9 last month from 56.7 in July, the second consecutive month of increase and the previous three months of decline. Following the results, the CME fedwatch tool reflected the new high of the probability (74% probability) that the Federal Reserve would raise the interest rate by another 0.75%.
Analysts pointed out that some important data on the US economy show that there is no sign of recession in the US economy. To a certain extent, this has pushed up the yield of US bonds and brought more boost to the US dollar. In addition, only when the inflation data of the third quarter released at the end of October shows that the price pressure has eased, can the central bank slow down the pace of tightening.
Another important data is the August consumer price index to be released on September 13. CPI is expected to be at a high level due to the drop in gasoline prices. Meanwhile, Jerome Powell, chairman of the Federal Reserve, recently stressed that the Federal Reserve is committed to fighting inflation with higher interest rates and does not intend to retreat. In view of the worries about inflation and rising interest rates, investors will think that this will make the Federal Reserve more active in raising interest rates, and the overall crypto market sentiment is not high.
Not only the US Federal Reserve, but also the European Central Bank's executive committee member nort said that the neutral interest rate may not be enough to solve the problem of high inflation, and the market is not unwise in pricing the interest rate increase in September. At the same time, he said that he is inclined to increase the interest rate by 75 basis points.
In terms of market conditions, BTC fell below $19000 and eth fell below $1500 as of 11:00 a.m. on September 7.
In terms of investment, according to a new report by KPMG, a global audit and consulting firm, global investment in cryptocurrency companies fell from a record $32.1 billion last year to $14.2 billion in the first half of 2022, and this slowdown will continue until the end of 2022. KPMG also expects that investors will shift from companies providing tokens and NFTs to blockchain infrastructure projects in the second half of the year, especially the use of blockchain in the modernization of financial technology. Analysts believe that people are increasingly focusing on solutions related to compliance and transaction traceability, as well as the increased interest of enterprises in stable currency, which is a low-risk way to invest in cryptocurrency.
Despite the slowdown in market conditions and investment enthusiasm, the crypto and blockchain industries continue to show signs of maturity. Payment giant visa pointed out that cryptocurrency has attracted the attention of consumers, investors, developers and even policymakers. Although the role of cryptocurrency in the future remains to be seen, it is certain that cryptocurrency will be able to be used in more scenarios in the future.
In addition, the visa global survey shows that more than half of the adults who pay attention to cryptocurrency hope that banks can provide cryptocurrency products; Among those who already own cryptocurrency, nearly 40% are likely to switch from major banks to banks that offer cryptocurrency products. Financial institutions also need to formulate cryptocurrency strategies as soon as possible to help consumers enter the cryptocurrency ecosystem smoothly and safely.
At the same time, KPMG also said that although it has declined since 2021, the pace of continued growth of cryptocurrency "highlights the growing maturity of the field and the breadth of technologies and solutions that attract investment".
The purchasing manager index is an index summarized through monthly surveys of purchasing managers, which can reflect the changing trend of the economy. It covers production and circulation, manufacturing and non manufacturing, and is divided into manufacturing PMI and service PMI. Some countries have also established construction PMI. The American Institute of supply management reported that the non Manufacturing Purchasing Managers' index rose to 56.9 last month from 56.7 in July, the second consecutive month of increase and the previous three months of decline. Following the results, the CME fedwatch tool reflected the new high of the probability (74% probability) that the Federal Reserve would raise the interest rate by another 0.75%.
Analysts pointed out that some important data on the US economy show that there is no sign of recession in the US economy. To a certain extent, this has pushed up the yield of US bonds and brought more boost to the US dollar. In addition, only when the inflation data of the third quarter released at the end of October shows that the price pressure has eased, can the central bank slow down the pace of tightening.
Another important data is the August consumer price index to be released on September 13. CPI is expected to be at a high level due to the drop in gasoline prices. Meanwhile, Jerome Powell, chairman of the Federal Reserve, recently stressed that the Federal Reserve is committed to fighting inflation with higher interest rates and does not intend to retreat. In view of the worries about inflation and rising interest rates, investors will think that this will make the Federal Reserve more active in raising interest rates, and the overall crypto market sentiment is not high.
Not only the US Federal Reserve, but also the European Central Bank's executive committee member nort said that the neutral interest rate may not be enough to solve the problem of high inflation, and the market is not unwise in pricing the interest rate increase in September. At the same time, he said that he is inclined to increase the interest rate by 75 basis points.
In terms of market conditions, BTC fell below $19000 and eth fell below $1500 as of 11:00 a.m. on September 7.
In terms of investment, according to a new report by KPMG, a global audit and consulting firm, global investment in cryptocurrency companies fell from a record $32.1 billion last year to $14.2 billion in the first half of 2022, and this slowdown will continue until the end of 2022. KPMG also expects that investors will shift from companies providing tokens and NFTs to blockchain infrastructure projects in the second half of the year, especially the use of blockchain in the modernization of financial technology. Analysts believe that people are increasingly focusing on solutions related to compliance and transaction traceability, as well as the increased interest of enterprises in stable currency, which is a low-risk way to invest in cryptocurrency.
Despite the slowdown in market conditions and investment enthusiasm, the crypto and blockchain industries continue to show signs of maturity. Payment giant visa pointed out that cryptocurrency has attracted the attention of consumers, investors, developers and even policymakers. Although the role of cryptocurrency in the future remains to be seen, it is certain that cryptocurrency will be able to be used in more scenarios in the future.
In addition, the visa global survey shows that more than half of the adults who pay attention to cryptocurrency hope that banks can provide cryptocurrency products; Among those who already own cryptocurrency, nearly 40% are likely to switch from major banks to banks that offer cryptocurrency products. Financial institutions also need to formulate cryptocurrency strategies as soon as possible to help consumers enter the cryptocurrency ecosystem smoothly and safely.
At the same time, KPMG also said that although it has declined since 2021, the pace of continued growth of cryptocurrency "highlights the growing maturity of the field and the breadth of technologies and solutions that attract investment".