After the short revival last week, bitcoin price is tested by the possibility of an interest rate hike of 0.5 percentage points in March and disputes between Ukraine and Russia. Market sentiments are divided in view of bitcoin’s short-term performance, but a new wave of volatility is almost unavoidable.
How will interest rate hikes affect bitcoin?
Track live crypto price of 10000+ coins!
Last week’s higher-than-expected CPI data pressured the Fed to take a firmer stance on surging commodity prices, with major investment banks also raising their forecasts for a rate hike in 2022.
In a note to clients, HSBC economist Ryan Wang said the Fed will seek to beat down inflation rate in the second half of the year by imposing stricter policies. It is expected that the Fed will raise interest rates in the early stage, raising interest rates by 50 basis points in March, and will further raise interest rates four times during the year, each time by 25 basis points.
The market is worried that multiple interest rate hikes by the Federal Reserve will increase the volatility of the US stock market and affect cryptocurrencies. Generally speaking, selling higher-risk assets has become one of the strategies in times of risk.
Although the interest rate hikes in the short-term could drive down the price of bitcoin, it is not the major price determinant of bitcoin, as the bitcoin market has developed enough and use cases continue to build up.
A pro-bitcoin Russian government?
When asked to name several governments that are anti-bitcoin, Russia is always on the top of our list. However, the country is showing signs of recognizing the potential of bitcoin and supporting it.
Recently, Russia’s Ministry of Economic Development made a proposal to introduce lower energy fees to miners and date centers in certain areas with “sustainable surplus in electricity generation,” and recognize crypto mining as a commercial activity. These actions not only contribute to the local mining activities, but could be viewed as a friendly signal to cryptocurrencies. With high inflation going in the country, normalizing crypto businesses could usher in a new wave of investors and drive up demand.
“Our position coincides with the position of the government that cryptocurrencies should be regulated, not banned. Effective regulation is needed that will allow citizens and organizations to legally acquire cryptocurrency, take it into account AML [Anti-Money Laundering] mechanisms and taxation,” said Anatoly Popov, deputy chairman of the executive board at Russia’s banking giant Sber.
Meanwhile, Ed Moya, senior analyst at Oanda, said that bitcoin has “really become the ultimate momentum trade and there are so many risks that can trigger a 40% drop out of nowhere.” However, JPMorgan strategists remain bullish on bitcoin’s long-term development, estimating that the future price of Bitcoin could reach $150,000, up from its prediction of $146,000 made in 2021.
How to beat volatility
In any case, the Bitcoin market will remain volatile for some time to come. But using the right investment method can make volatility a powerful tool for profit. BTC futures trading enables traders to long or short BTC, so traders can earn money as long as their predictions are right. While spot traders only earn profits when the price of bitcoin goes up. Furthermore, traders can borrow leverage from exchanges to increase their buying power, thus multiplying their profits.
For example, like the current price, it’s clearly at support, isn’t it a good opportunity to buy?
For example, a trader opens a long position of 100 BTC at the price of $42,000 with Bexplus 100x leverage. Then, the price goes up to $47,000. As a result, he will make a profit of ($47,000 – $42,000) * 100 BTC / $47,000 = 10.6 BTC, while the margin he needs is only 1 BTC.
Bexplus offers 100x leverage in BTC, ETH, DOGE, ADA, and XRP futures contracts. Bexplus is trusted by over 1 million traders worldwide, including the USA, Japan, Korea, and Iran. No KYC, no deposit fee, traders can receive the most attentive services, including 24/7 customer support.
Bexplus is one of the few exchanges that offer a free demo account, which puts you through its rules and trading widgets. Inside the demo account is 10 BTC for traders to practice and try out strategies as much as they like.
- BTC Wallet: up to 21% Annualized Interest Without Any Risks
Bexplus users can gain profits not only from trading. Join the Bexplus wallet to earn up to 21% annualized interest without taking risks. With up to 21% annualized interests, it is no doubt one of the most profitable rates in the industry.
The top-ranking Bexplus app integrates all the necessary functions and tools (real-time charts, a variety of indicators, news alerts and etc.) while keeping a minimalist and intuitive interface. With the Bexplus app, you can manage your account anywhere and anytime you want. Furthermore, the 24/7 notification could keep you updated with big price movements, making it easier to secure your positions.
- Deposit Activity to Earn 100% BTC Cashback
Deposit BTC in the Bexplus account and you can earn a 100% BTC bonus, which can also be used to trade futures contracts. Plus, more margins reduce the likelihood of forced liquidation. The more deposit, the more bonus you will get. Up to 10 BTC is available for each deposit. (Bonuses are not withdrawable, the profit obtained with the bonus can be withdrawn.)