As soon as the Federal Reserve spoke, Bitcoin broke through $52,000!
On Wednesday local time, the three major U.S. stock indexes collectively opened lower and closed mixed. The Dow rose 0.29% and hit a new record high. The S&P 500 index fell 0.03% and the Nasdaq fell 0.58%.
On the news, the Federal Reserve’s FOMC announced the minutes of the January monetary policy meeting. Fed officials believed that the US economy was “far from” reaching the target and reiterated that it would maintain easing policies.
Fed reiterated to maintain accommodative policy
On Wednesday, the Federal Reserve FOMC announced the minutes of its January monetary policy meeting. Fed officials believed that the US economy was “far from” reaching its target and reiterated that it would maintain easing policies.
Although the December meeting minutes are the first time Powell has mentioned the term “taper” QE debt purchases in such minutes since he became the chairman of the Federal Reserve, the latest January meeting did not mention this keyword that affects the market’s sensitive nerves. .
Regarding the Fed’s asset purchase plan and interest rate policy that the market is concerned about, the minutes of the meeting show that it is almost impossible for the Fed to make any changes in the short term.
“Participants pointed out that the current economic situation is far from the long-term goals of the committee. Until these goals are achieved, policy stances must be maintained. Therefore, all participants support the maintenance of the current policies set by the committee, as well as interest rates and asset purchases. The pace is guided by results.”
Fed Res Greatly Eased Financial conditions and provided substantial support to the Economy
At the end of January this year, the Fed kept interest rates unchanged as the market expected, while maintaining a monthly asset purchase plan of $120 billion.
Fed officials pointed out that the quantitative easing program has increased the Fed’s balance sheet to nearly 7.5 trillion U.S. dollars, “greatly eased financial conditions and provided substantial support to the economy.”
It should be noted that Fed officials have expressed concern about the pace of economic recovery, and the pace of economic recovery and labor market improvement has slowed in recent months. As the economy is far from reaching its target, participants felt that it may take some time to make substantial further progress.
Since the January meeting, Fed officials have almost unanimously stated that they do not expect major policy changes until more progress is made in the labor market and inflation targets. Powell and others emphasized that they will not raise interest rates to prevent inflation, but will wait for actual price pressure to appear before tightening policies.
The Dow fell more than 180 points at the beginning of trading, and it turned up before the Federal Reserve announced the meeting minutes in midday. After the announcement of the meeting minutes, the declines of the S&P and Nasdaq have narrowed, and the Dow’s gains have expanded to more than 100 points.
As of the close, the Dow Jones Industrial Index rose 90.27 points, or 0.29%, to 3,161.32 points; the Nasdaq index fell 82 points, or 0.58%, to 13,965.50 points; the S&P 500 index fell 1.26 points, or 0.03%, to 3,931.33 points .
Verizon Telecom rose more than 5%, Chevron rose more than 3%, leading the Dow rose. Buffett increased his holdings of these two stocks last quarter.
*****Stocks were among the top decliners. Sundial Growers fell more than 21%, Tilray fell more than 9%, and Aurora***** fell more than 7%. Most technology stocks fell, Nvidia fell more than 2%, Apple fell more than 1%.
JD.com rose more than 3%
China’s concept stock JD.com rose more than 3%, setting a record closing high for two consecutive days. Vipshop will rise by more than 2%, Xiaopeng Motors and Weilai will fall by more than 3%, Baidu will fall by more than 5%, and Douyu will fall by more than 10%.
Earlier, the short-selling agency Wolfpack Research issued a short-selling report, claiming that the drone manufacturer EHang Intelligent manipulated a “well-planned stock price raising campaign”, claiming that the company lied about its products, manufacturing, revenue and partnerships.
According to reports, EHang Smart responded that the short selling report contained many errors, unconfirmed statements and misinterpretations of information. EHang Smart rose by about 74% at one time and closed up 67.88%.
Bitcoin breaks through $52,000
After returning to above US$50,000 overnight, the price of Bitcoin continued to rise, reaching a peak of US$52,600, which was more than US$3,000 from the intraday low. As of now, Bitcoin has reported $52,210.76, a 24-hour increase of more than 7%.
Affected by Bitcoin (BTC) continuing to refresh its intraday record highs, many blockchain concept stocks rose. Riot Blockchain (RIOT) closed up nearly 31.
Marathon Patent (MARA) rose nearly 10%, and it rose more than 30 intraday % SOS closed up more than 8%.
Canaan Technology (CAN) rose more than 4%.
Last week, Tesla announced that it has invested 1.5 billion US dollars to buy Bitcoin and will soon begin accepting Bitcoin payments to buy Tesla cars.
After getting Tesla’s endorsement, Bitcoin seems to have embarked on the fast lane to be accepted by institutions. Mainstream payment institutions, large custodian banks, and asset management giants have all begun to express their support for digital currencies.
Mastercard and New York Mellon, one of the most historical banks in the United States, also jumped into the Bitcoin market on February 10th and 11th, respectively.
According to the official statement of MasterCard, it will support “selected cryptocurrencies” in the payment network, allowing more stores to accept them as a means of payment.
Immediately after the second day of MasterCard’s statement, the veteran custodian bank New York Mellon announced that it would hold, transfer and issue bitcoin and other cryptocurrencies on behalf of its asset management clients.
Bitcoin also launched an upswing following the trend, rising above $50,000 for the first time on Tuesday (16th). As of now, it has risen by about 82% in less than two months this year.
However, JP Morgan Chase strategists headed by Nikolaos Panigirtzoglou wrote in a report on Tuesday that unless volatility quickly subsides, Bitcoin’s current price “looks unsustainable.”
JPMorgan Chase stated that in the past five months, the market value of Bitcoin has increased by about US$700 billion, even though the total institutional inflow is only about US$11 billion. But the limited supply of tokens and large retail demand will push up prices.
The JPMorgan Chase team said: “The trend since January of this year seems to be more affected by speculative capital flows.” There are also some institutions that believe that the current enthusiasm for Bitcoin may end in the way the bubble burst in 2017.
Liz Ann Sonders, chief investment strategist at Charles Schwab, said in an interview that from an emotional point of view, the market is full of bubbles.
However, Cathie Wood, the head of ARK Investment Management, known as the “Bull Queen”, and its company analyst Yassine Elmandjra said that the current level of Bitcoin hype is very low, and speculative activities are far less than that of the second half of 2017.
In the bull market, this is a tenfold super opportunity in ten years. On the contrary, Cathie Wood believes that institutions are the main drivers of Bitcoin’s rise.
Thanks to the growing interest of institutions in Bitcoin, Ark Investments is very optimistic about Bitcoin’s expectations this year.
According to Ark Investment’s 2021 vision, if all constituent companies in the S&P 500 allocate 1% of their cash to Bitcoin, then the price of Bitcoin may rise by about $40,000.
If these companies allocate 10% of their cash Bitcoin, then the price of the cryptocurrency will correspondingly increase by $400,000.
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