When will Cryptocurrency go up after Fed rate hike?
The Fed announced a rate hike on May 4th, 2022
When will cryptocurrency go up? The 2017-18 Crash
In Sept 2017, The Federal Reserve announced that it would begin reducing the size of its balance sheet, a process that continued until early 2019
During this period, this is what happened
- First 3 months, Bitcoin went from $ 3000 to $ 18000
- Next 13 months, crashed to$ 3000
- Next 12 months, increased 3 fold
- Next 18 months, 3 fold again
The Crypto market was much smaller then, about 5-10% of its current size, in the range of $ 100 Billion, Bitcoin alone was at $ 65 Billion. US Household wealth was about 92 Trillion then. By the second quarter of 2019, US Household Wealth increased to 114 Trillion.
So what we know from 2017 to 2019 that Bitcoin prices had doubled while US household wealth increased by nearly 24%.
The Cryptocurrency market is worth about 2 Trillion now. In the context of both Domestic and Global wealth, its share is less than 1%.
So here is a summary
- The last time the Fed reduced the size of its balance sheet, prices doubled in an 18 month period
- While it is likely the pace of growth of Global wealth will slow down, the share of Cryptocurrency is less than 1% of Global wealth. So there is substantial room for expansion
- Cryptocurrency continues to make it to the Portfolios of wealthy and middle class Households Globally. There are numerous published surveys around this.
When will cryptocurrency go up? Should I buy any Cryptocurrency now?
Now, will History repeat itself? Time will tell. But what we know should make us feel confident about what may happen next. That said, the usual discussions around the Utility of Cryptocurrencies will continue to remain and have a bearing on Prices and Valuations, so one cannot ignore that too.
The Trade is yours now to make. Buy or Sell?
Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in Stocks or Coins. Please consult a registered investment advisor to guide you on your financial decisions.