While the Bitcoin ecosystem awaits the FED meeting; Warnings came from names such as Elon Musk, Peter Schiff, Bill Ackman. On the other hand, it was noteworthy that there has been a recent outflow of funds from BTC funds. Here are the details…
Elon Musk and famous names warn against FED move
the US Federal Reserve (FED), the US Department of the Treasury and the FDIC; It is investigating a potential guarantee for all bank deposits in the US. While the banking crisis continues despite the efforts of the US government and regulators, a total of $18 trillion deposits will be guaranteed should the crisis escalate. The FDIC, the Fed and the Treasury Department had previously assured taxpayers that they would not pay for this crisis. While officials did not consider the move necessary because they believed the banking sector was safe, First Republic Bank, which lost 47 percent on Monday, signaled that efforts should be made to prevent the spread of the contagion.
Meanwhile, traders are waiting for the FOMC’s decision to raise rates to see if the Fed is truly “dove”. The decision is expected to be announced tomorrow, March 22, 2023, at 21.00 CEST. Economists, businessmen and crypto influencers have warned the US Fed of worsening market conditions. Billionaire Bill Ackman shared his concerns about the worsening banking crisis ahead of the FOMC meeting on Twitter. He believes the Fed should take a break from a series of major shocks in the system after three banks in the US closed in a week, Credit Suisse went bankrupt and small bondholders were reset. Tesla CEO Elon Musk replied to Bill Ackman, “The Fed needs to lower the rate by at least 50 basis points on Wednesday.”
He also believes that the FDIC should increase the current $250,000 limit to prevent bank runs. Musk and some other important figures warned about the Fed’s rate hikes last year and pointed out that this would deepen the recession period. Economist Peter Schiff also blamed the US Fed and FDIC for the current banking crisis in the US.
Eyes on Bitcoin price: BTC comes out of funds
Bitcoin price is currently trading at $27,800, down more than 1% in the last 24 hours as investors await the Fed’s decision to raise interest rates. If the Fed decides to pause the rate hike on Wednesday amid bank woes, according to some, the BTC price could hit the $30,000 mark. According to the CME FedWatch Tool, the probability of the Fed raising rates by 25 basis points is 74.5 percent. Meanwhile, cryptocoin.com As we have also reported, while the Bitcoin price reached new highs last week, institutional exits from Bitcoin continued simultaneously.
In its latest weekly report, CoinShares reported that BTC funds saw huge outflows last week. However, in a year-to-date chart, entries dominate the exits. Bitcoin was the primary focus, seeing a total of $244 million last week. While short-bitcoin is currently the largest inflow investment product to date at $49 million, it has seen a total outflow of $1.2 million.
The report notes that negative emotion is particularly prevalent in the United States and Europe. In addition to institutional players, miners seem to be partially emptying their stocks in this rally, as can be seen in the chart above. Bitcoin miners suffered in the crypto winter of 2022 as mining costs skyrocketed and BTC prices continued to fall. This created a huge hurdle in the profitability of miners.
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