The financial and crypto markets continue to undergo strong decreases, while investors await data on inflation and decisions of the Fed. Despite favorable regulatory advances, Bitcoin and Ethereum fall, in the hope of a deliverance which will certainly come from the next data on the ICP and the FOMC. But what will he really be?
The Crypto market and the scholarship vacillate!
Wall Street continues its bearish race started this Monday, recording a clear correction. Indeed, the S&P 500 lost 2.6 %, the Nasdaq-100 drops 3.1 %and the Dow Jones fell by 2.2 %. This tension has repercussions in Asia, where the future of Nikkei 225 and Hang Seng indicate new losses. In this context of nervousness, Bitcoin dropped 5.8 % to 76,838 dollars, while Ethereum dived from 11.5 % to $ 1,795.
While the Crypto market is under pressure, the Trump administration, for its part, is preparing an executive order aimed at revoking the banking restrictions imposed under Biden. The initiative would seek to cancel the “ChokePoint 2.0 Operation”, a controversial policy that would have limited the access of crypto companies to banking services. An initiative that had already been announced last January by Travis Hill.
The decree could also clarify the status of stablecoins and soften the rules of the Fed concerning banks with digital assets. This turnaround is part of the new Pro-Crypto orientation of the White House, after Trump's recent declarations on the creation of a national bitcoin reserve.
ICP and FOMC: challenges for risky assets
Investors are looking forward to the publication of the consumer price index (ICP) Wednesday March 12, 2025which should show an increase of 0.3 % in February (against 0.5 % in January). Annual inflation is expected at 2.9 %, slightly decline compared to the 3 % of January. Any upward surprise could delay the rate drops provided by the Fed, weighing more on the stock markets and crypto.
In addition, the next FOMC meeting on March 18 and 19, 2025 could have a devastating effect on cryptos, in particular Bitcoin. As Ryan Lee, chief analyst at Bitget explains:
During the FOMC meeting, the federal reserve will probably maintain its rates at 4.25 %-4.50 %, with a neutral tone at caution, although a Hawkish change may appear if the concerns concerning inflation is surface. The price of cryptocurrencies, such as Bitcoin, could stagnate or decrease compared to their current range from 83,000 to 76,000 dollars, especially if a Hawkish result strengthens the dollar and yields, exerting pressure on risky assets.
As the capitalization of the crypto market continues to fall, the Fed monetary tightening therefore continues to worry. However, some analysts believe that the recent fall in the dollar, the strongest since the 2008 financial crisis, could stimulate markets in the coming months.
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