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The price of Bitcoin continues to fall due to politics …

The price of Bitcoin continues to fall due to politics ...

Global investment bank Goldman Sachs warns that Bitcoin is increasingly sensitive to the Fed’s reference interest rate increase as cryptocurrency becomes increasingly accepted.

The price of Bitcoin has fallen due to Fed policy

Goldman Sachs foreign exchange strategy manager Zach Pandl and financial analyst Isabella Rosenberg said Bitcoin has experienced mass adoption over the past two years. As a result, the correlation of Bitcoin with macro assets is becoming stronger.

This is stated in a published research report detailing the vulnerability of Bitcoin to the Federal Reserve’s policy of increasing reference interest rates.

Higher government bond yields have affected the performance of technology stocks over the past few weeks. The Nasdaq 100 index fell 13 percent in one year.

Goldman Sachs analysts believe that Bitcoin and other digital assets are experiencing a similar fate. Crypto assets are not immune to macroeconomic factors, including monetary tightening by central banks.

Capital markets now think the Fed will raise interest rates five times this year. Goldman Sachs believes the Fed can raise interest rates at every meeting.

Statement after the meeting Federal Open Market Committee (FOMC) last week did not specify the exact time when interest rates will rise. But there are signs that this could happen as early as after the March meeting.

“Over time, the development of blockchain technology, including its application in metaversecan provide an incentive to value certain digital assets, ”Pandl explained.

Proof that Goldman Sachs is becoming increasingly dependent on Bitcoin

Not so long ago, Goldman Sachs said metaverse it could be an $ 8 trillion opportunity. Rival bank Morgan Stanley also gave similar estimates for the sector metaverse.

Earlier this month, Goldman Sachs predicts that Bitcoin could reach $ 100,000 as crypto assets hold a share of the gold market.

Meanwhile, Switzerland’s largest bank, UBS, has warned that the cryptocurrency market could stagnate amid expectations from interest rates and Fed regulations.

Currently, BTC is trading at a price of $ 38,600 based on CoinGecko data. BTC rose 5 percent over the past week, but fell 19.2 percent in 30 days. Still, BTC is still how 16.8 percent since the beginning of the year. [news.bitcoin.com/ed]

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