JUST

Reserve

Rally

THIS

Hedge

<p>Bitcoin, the largest cryptocurrency by market capitalization, has stayed resilient amidst fears of a looming recession and the ongoing banking collapse. Despite a global crackdown on cryptocurrency &#8211; something many are calling &#8220;<a href="https://blockworks.co/news/operation-choke-point-2-0">Operation Chokepoint 2.0</a>&#8220;, the markets have rallied significantly since the start of 2023, with Bitcoin hitting a new yearly high of $30,000.</p>



<p></p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">YTD Returns:<br><br>Bitcoin : +83%<br>Gold: +8%<br>S&amp;P500: +7%<br>Nasdaq 100: +20%<a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a> <a href="https://t.co/gR0IXENmzr">pic.twitter.com/gR0IXENmzr</a></p>&mdash; Chain Debrief (@ChainDebrief) <a href="https://twitter.com/ChainDebrief/status/1645634761271177216?ref_src=twsrc%5Etfw">April 11, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>So why has crypto rallied over the last few days, and are we about to see a continuation to new highs?</p>



<p><strong>Also Read: </strong><a href="https://chaindebrief.com/from-panic-to-profits-how-a-bank-run-sparked-a-crypto-market-rally/">From Panic To Profits: How A Bank Run Sparked A Crypto Market Rally</a></p>



<h2 id="bitcoin-8211-a-hedge-against-the-global-banking-crisis">Bitcoin &#8211; a Hedge Against The Global Banking Crisis?</h2>



<p>While the collapse of leading banks like SVB and Silvergate affected many crypto companies, it also shined a light on the fragility of the U.S. Banking system.</p>



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe title="The Silicon Valley Bank Bailout  | What It Means For Crypto" width="800" height="450" src="https://www.youtube.com/embed/ONOIsb4cZU4?start=605&#038;feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>
</div></figure>



<p>Ironically, the phrase &#8220;Not your keys, not your coins&#8221; can now be applied to FIAT currencies as depositors worry over the solvency of their banks.</p>



<p>Furthermore, the intervention of government agencies to bail out these &#8220;too big to fail&#8221; banks, without losses being borned by taxpayers, sparked rampant rumors of Quantitative Easing, or as we like to call it, &#8220;money printing&#8221;.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">In case you don’t comprehend how serious the US banking problems are: <a href="https://t.co/AbQ1hHi5Ye">pic.twitter.com/AbQ1hHi5Ye</a></p>&mdash; Arthur Hayes (@CryptoHayes) <a href="https://twitter.com/CryptoHayes/status/1636922548536455168?ref_src=twsrc%5Etfw">March 18, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>According to <a href="https://www.biancoresearch.com/visitor-home/">Bianco Research,</a> these efforts by the Federal Reserve have &#8220;reversed roughly half of all&#8221; the quantitative tightening they accomplished over the past year.</p>



<p>Speculators are drawing parallels to the previous crypto bull run, which was sparked by not only the Bitcoin halving cycle, but also the Federal Reserve expanding the money supply to ease economic pressures caused by the Covid-19 pandemic.</p>



<p></p>



<p></p>



<p><strong>Also Read: </strong><a href="https://chaindebrief.com/heres-how-blockchain-can-fix-bank-runs/">Here’s How Blockchain Can Fix Bank Runs</a></p>



<h2 id="strong-death-of-the-dxy-strong"><strong>Death of the DXY!</strong></h2>



<p>The DXY, or U.S. Dollar Index, is a measure of the value of the U.S. dollar relative to a basket of foreign currencies.</p>



<p>Historically, a low DXY, or weak U.S. Dollar<a href="https://www.reuters.com/article/us-markets-forex-correlation-analysis-idUSTRE5B64HQ20091207">, is bullish for risk-on assets like cryptocurrencies,</a> and vice versa.</p>



<figure class="wp-block-image size-full"><img decoding="async" width="954" height="295" src="https://chaindebrief.com/wp-content/uploads/2023/04/image-7.png" alt="" class="wp-image-37275" srcset="https://chaindebrief.com/wp-content/uploads/2023/04/image-7.png 954w, https://chaindebrief.com/wp-content/uploads/2023/04/image-7-300x93.png 300w, https://chaindebrief.com/wp-content/uploads/2023/04/image-7-768x237.png 768w" sizes="(max-width: 954px) 100vw, 954px" /><figcaption class="wp-element-caption">Image Courtesy: Marketwatch</figcaption></figure>



<figure class="wp-block-image size-full"><img decoding="async" width="941" height="506" src="https://chaindebrief.com/wp-content/uploads/2023/04/image-8.png" alt="" class="wp-image-37276" srcset="https://chaindebrief.com/wp-content/uploads/2023/04/image-8.png 941w, https://chaindebrief.com/wp-content/uploads/2023/04/image-8-300x161.png 300w, https://chaindebrief.com/wp-content/uploads/2023/04/image-8-768x413.png 768w" sizes="(max-width: 941px) 100vw, 941px" /><figcaption class="wp-element-caption">Image Courtesy: Coinmarketcap</figcaption></figure>



<p>The inversed correlation has held true since the start of this year, with Bitcoin reaching YTD highs while the DXY explores new lows.</p>



<p></p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">JUST IN: <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f1e8-1f1f3.png" alt="🇨🇳" class="wp-smiley" style="height: 1em; max-height: 1em;" /> China and Malaysia consider creating &#39;Asian Monetary Fund&#39; to reduce dependence on US dollars.</p>&mdash; Watcher.Guru (@WatcherGuru) <a href="https://twitter.com/WatcherGuru/status/1643301306591764493?ref_src=twsrc%5Etfw">April 4, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>Although the DXY&#8217;s fall could be attributed to a restart in Quantitative Easing,<a href="https://watcher.guru/news/europe-must-reduce-its-dependency-on-us-france-president-macron"> recent announcements</a> from global superpowers could indicate a shift away from the U.S. Dollar as the world&#8217;s reserve currency.</p>



<p></p>



<p><strong>Also Read: </strong><a href="https://chaindebrief.com/i-looked-into-the-historical-cycles-of-crypto-heres-what-i-found/">I Looked Into The Historical Cycles Of Crypto, Here’s What I Found</a></p>



<h2 id="strong-bitcoin-rallies-ahead-of-strong-strong-cpi-announcement-strong"><strong>Bitcoin Rallies Ahead of</strong> <strong>CPI Announcement</strong></h2>



<p>As the U.S. banking system continues to implode, <a href="https://www.bloomberg.com/news/articles/2023-03-22/wall-street-sees-fed-hike-as-hawkish-as-possible-with-bank-woes#xj4y7vzkg">Wall Street expects</a> that the Federal Reserves&#8217; hands are tied when it comes to rate hikes.</p>



<p>While the FED previously signaled hawkishness, or an intention to aggressively curb inflation, billions of dollars in bailouts and fear of further bank runs could force a reversal on their policies.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">*HERN SAID POWELL ANTICIPATES ONE MORE FED RATE HIKE THIS YEAR<br><br>15 minutes later<br><br>*CORRECT: POWELL CITES FORECASTS SHOW ONE MORE HIKE, HERN SAYS<br><br>Rugged</p>&mdash; db (@tier10k) <a href="https://twitter.com/tier10k/status/1641137240519606272?ref_src=twsrc%5Etfw">March 29, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>With the CPI, or Consumer Price Index data <a href="https://www.bls.gov/schedule/news_release/cpi.htm">scheduled to be released tomorrow</a> (12th April 2023), a Bitcoin rally could suggest that traders are awaiting a higher-than-expected CPI announcement.</p>



<p>Coupled with the release of the previous FOMC Minutes and<a href="https://twitter.com/tier10k/status/1644316695698321417?s=20"> lower unemployment rates, </a>continued inflation could push Bitcoin higher than $30,000.</p>



<p><strong>Also Read: </strong><a href="https://chaindebrief.com/thanks-for-the-free-money-heres-how-ive-been-trading-the-cpi-with-a-100-win-rate/">Here’s How I’ve Been Trading The CPI with a 100% Win Rate</a></p>



<h2 id="strong-closing-thoughts-strong"><strong>Closing Thoughts</strong></h2>



<p>While Bitcoin&#8217;s recent rally has been a sigh of relief to everyone in Web3, it is important not to get caught up in the frenzy, especially when market sentiment has shifted from fear to greed so quickly.</p>



<figure class="wp-block-image size-full"><img decoding="async" width="744" height="318" src="https://chaindebrief.com/wp-content/uploads/2023/04/image-10.png" alt="" class="wp-image-37278" srcset="https://chaindebrief.com/wp-content/uploads/2023/04/image-10.png 744w, https://chaindebrief.com/wp-content/uploads/2023/04/image-10-300x128.png 300w" sizes="(max-width: 744px) 100vw, 744px" /></figure>



<p>Regardless, Bitcoin&#8217;s status as one of the top performing assets this year, alongside it&#8217;s narrative as not only a hedge against a devaluing U.S. Dollar, but also a hedge against the banking crisis, could spark a continued rally going into Q2 2023.</p>



<p>A key driver for continuation would be the upcoming CPI announcement, especially if actual results are higher than the current market expectation.</p>



<p><strong>Also Read: </strong><a href="https://chaindebrief.com/the-shocking-truth-about-bitcoins-limited-supply/">The Shocking Truth About Bitcoin’s Limited Supply</a></p>



<p><em>[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]</em></p>



<p><em>Featured Image Credit:</em>&nbsp;<em>Chain Debrief</em></p>

Bitcoin Hits Yearly High of US$30,399 – Here’s Why The Crypto Markets are Up This Week

目次

Chain Debrief

2023年4月11日公開の他の記事

Crypto Exchange GDAC Halts Deposits and Withdawals Following $13 Million Hack

1inch supports BNB Chain’s Zero2Hero Hackathon’s DeFi track

Polygon Price Analysis 11/4: MATIC Bulls Dominate Market, +46% Growth in Q1

IMF renews calls for crypto regulation following failures of FTX and crypto-friendly banks

Tron Vs. Ethereum: Analyzing The Performance Gap And Its Impact On Crypto Investors

Fan Tokens on for a Good Market Day Ahead of Massive Rallies

ニュースレターを購読して暗号資産の最新情報を毎日入手！