Our favorite crypto chaos wizard, Jerome Powell, momentarily turned Bitcoin into a pumpkin, sending it tumbling below $96K briefly. Wall Street also caught the spook. Ethereum dropped 14.1%, Dogecoin tumbled a brutal 25.2%, and Solana slid 15.2% in the last week. But amidst the carnage, Hyperliquid (HYPE) skyrocketed 66.1%, Movement (MOVE) climbed 34.5%, and Bitget Token (BGB) rose 29.6%.Sound familiar? That’s because Powell’s got us all living in a loop.When J-Powell got-to-yapping yesterday, it wasn’t just to announce a 0.25% rate cut. He also announced the Fed had revised their plan of 3 rate cuts in 2025, down to 2 – and that their new targeted inflation rate would be 2.5% instead of 2.1%.
His comments imply loans/credit repayments will stay higher than previously expected in 2025 → encouraging folks to spend less, in an attempt to keep inflation down.
(And by raising their target inflation rate up to 2.5%, they’re subtly admitting they’re struggling to control it).
But here’s the thing – it’s all theatre.
They might change their mind again in a few months (they often do).
The trick of it all is: simply by saying they’re making fewer rate cuts next year, they can get people selling assets, cooling down the market, and buying time to see if the data changes…
‘Cause everyone was already expecting a pause on cuts in January, and the Fed doesn’t meet in February – so by the time March’s meeting rolls around, the market could once again be ready for 3 cuts.
This week, we’re talking:
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How Bitcoin steadies as Wall Street panics. The VIX hits a historic high, but Bitcoin starts breaking away from stock market chaos.
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Big exchanges embrace Layer 2 solutions Kraken joins the list of CEXes launching Ethereum L2s.
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Craig Wright dodges jail again The self-proclaimed creator of Bitcoin avoids another prison sentence.
Riding the VIX Wild Wave
The Volatility Index, better known as the VIX or Wall Street’s “fear gauge,” just threw one of its trademark tantrums—spiking to its second-highest level ever.
Panic? Doesn’t feel like it, at least if you don’t go to bed every night staring at the VIX.
But for Bitcoin, it might mean opportunity.
The VIX-Bitcoin Tango
Historically, when the VIX surges, investors flee to safer havens like cash, gold… and increasingly, Bitcoin.
This wasn’t always the case, as BTC was seen as a wildly volatile alternative asset historically.
However, in today’s day and age, a rising VIX, signaling stock market chaos, often nudges Bitcoin into the spotlight as a non-traditional hedge.
According to Bloomberg, Bitcoin’s correlation with the S&P 500 has recently hit a two-year low, hinting at a growing role as a portfolio stabilizer.
Numbers and Nostalgia
Take October 2023: the VIX soared by 35%, fueled by geopolitical strife and inflation jitters.
The last time we saw such a spike? Bitcoin rallied 20% over the following six months.
Correlation or causation? Will history repeat itself? If nothing else, it’s another chapter in Bitcoin’s narrative as a volatility sponge for jittery investors.
What’s this mean for you?
As we’re sure you’re familiar with, Bitcoin has its own mood swings. Whether the VIX calms down or continues its wild ride, we may see a near future where this Wall Street barometer might clue you in on Bitcoin’s next big move.
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