The situation in the Middle East was more volatile than expected, with both sides repeatedly attacking each other, causing significant market fluctuations. I attempted aggressive purchases of cryptocurrencies and Japanese yen, but was unable to manage the trades as successfully as I had hoped.
However, I assume it is unlikely that direct attacks will continue much further, thus ending excessive risk-off movements. I anticipate adjustments in the prices of oil and gold going forward.
Here are the three key points to watch for the future:
- U.S. Rate Hike Signals Illuminate, Former FRB Economist Points to Inflation Expectations
- For U.S. monetary policy officials, bond market inflation forecasts are crucial in decision-making. The signals that traders are sending could potentially be problematic.
- According to Benson Durham, Global Asset Allocation Head at Piper Sandler and former Federal Reserve Board (FRB) economist, the long-term inflation expectations he has adjusted have risen slightly in recent months, exceeding the authority’s target of 2%. This indicates that traders foresee ongoing price pressures.
- The risk for central banks is that such expectations might actually fuel real inflation, potentially prompting U.S. monetary authorities to respond with rate hikes, Durham says.
- “Unrestrained long-term inflation expectations are a strong motivator for further rate hikes. We’re not quite there yet, but it’s a concerning stage,” Durham commented in an interview. (Source: Bloomberg)
- High Likelihood of Rate Hikes if Price Rises Continue, Says BOJ Governor
- On the 19th, Kazuo Ueda, Governor of the Bank of Japan, spoke in Washington, indicating that there is a “very high” likelihood of raising interest rates if fundamental prices continue to rise.
- Governor Ueda, speaking at an event at the Peterson Institute for International Economics, noted that the core inflation rate remains below the BOJ’s target of 2%, and long-term inflation expectations are around 1.5%, necessitating the continuation of an accommodative monetary policy for the time being.
- He stated that the BOJ’s policy has become more flexible since discontinuing unconventional easing measures at the March monetary policy meeting, and future data could lead to changes in short-term interest rate targets. “We need to proceed cautiously with policy, assess the impact of recent policy changes on the economy and prices, and consider further adjustments if deemed appropriate,” he said. He also mentioned a reduction in government bond purchases, though the timing and scale have not been decided. (Source: Reuters)
- Bitcoin Successfully Completes Its Fourth Halving | Bullish Forecast of $250,000
- Bitcoin (BTC) reached its 840,000th block, marking the successful completion of its fourth halving event.
- The cryptocurrency community is optimistic about a bullish market post-halving, with some predicting it could reach as high as $250,000.
- Prominent investor Tim Draper told Cointelegraph that the halving would likely push Bitcoin’s price “above $250,000”. “The simple reason for a post-halving price increase is the decrease in supply and the continued upward pressure on demand. In a free market, prices naturally rise,” he said.
- Meanwhile, Herbert Sim noted in Cointelegraph that other factors also influence Bitcoin’s price. “Halving is not the only factor that predicts price actions,” he said, pointing out that the recently approved Bitcoin ETF in Hong Kong could also significantly impact the price. “Major banks in China will also have to start buying Bitcoin,” Sim suggested. (Source: Cointelegraph)
With the eagerly awaited halving now completed, cryptocurrencies have moved significantly due to the deteriorating Middle East situation, but the real rise is yet to come. I plan to continue buying on dips.
P.S.
On April 20th at around 9:10 AM, we reached block 840,000, completing the long-awaited fourth Bitcoin halving.
Bitcoin’s halving refers to the phenomenon where the mining reward for Bitcoin is halved. Specifically, the reward for people (miners) who add new blocks to the Bitcoin blockchain (mining) halves approximately every four years. This mechanism is intended to control Bitcoin’s supply and prevent inflation.
From historical data, here are the AI-predicted future Bitcoin prices after past halvings:
- 2012 Halving (11/28/2012): Mining Reward: 25BTC Post-Halving High: $1120 Post-Halving Low: $12
- 2016 Halving (7/9/2016): Mining Reward: 12.5BTC Post-Halving High: $2856 Post-Halving Low: $624
- 2020 Halving (5/11/2020): Mining Reward: 6.25BTC Post-Halving High: $58763 Post-Halving Low: $9446
- 2024 Halving (4/20/2024): Mining Reward: 3.125BTC Post-Halving High: $183634 Post-Halving Low: $29518
Of course, AI predictions do not always come true, and the actual market prices may vary from these highs and lows.
However, market movements ultimately boil down to human psychology, and many people expect prices to settle around these ranges, increasing the likelihood of such movements.
Being aware of where the mass market aims might help you set benchmarks for buying and selling.
Have a great weekend!
