Concerns over interest rate hikes grew following hawkish remarks at the Jackson Hole meeting, leading to a decline in the prices of risk assets such as Bitcoin.
Want the next one from this channel too?
The main themes of this year's Jackson Hole meeting were financial innovation and payment policy, with sessions on digital assets and stablecoins included in the official agenda. Discussions covered a wide range of topics, including tokenized finance and payment innovation.
Traditional financial institutions like the Bank for International Settlements (BIS) assessed that stablecoins are not yet suitable for large-scale payment methods. They pointed out issues with redemption guarantees and anti-money laundering, showing a preference for tokenized deposits as an alternative.
Cornell University researchers confirmed that the trading volume of dollar-based stablecoins like USDT and USDC has surged by tens of multiples in recent years. They predict that the stablecoin market will likely grow even larger in the future, which could further strengthen the value of the US dollar. However, concerns were also raised about potential side effects, such as the depreciation of other national currencies.
According to Professor Eswar Prasad's paper, approximately 36% of emerging market companies globally currently raise funds in dollars. However, if stablecoins become widespread, this figure is projected to skyrocket to 88%. This would lead to significant changes in corporate funding methods and further accelerate the adoption of stablecoins.
According to Fed Watch, market participants now see a 57% probability of the Federal Reserve (Fed) raising its benchmark interest rate in September. This is a jump of nearly 20 percentage points compared to a week ago, leading to a corresponding decline in the prices of risk assets like Bitcoin.
Chairman Kevin stated that US Treasury buybacks are appropriate only in times of national crisis and are not a suitable policy during normal periods like the present. This indicates a divergence between the Treasury's dovish stance and the Fed's hawkish response.
The Fed emphasized inflation control as its top priority. Annual inflation currently stands in the 4% range, and the upward trend in prices has continued for the past six months, reaffirming the Fed's hawkish resolve to achieve its 2% target.
Shin Hyun-sung, Governor of the Bank of Korea, interpreted Chairman Kevin's remarks as signaling a September interest rate hike. He assessed that the Fed's hawkish stance has become much stronger than in June-July, and in this atmosphere, Bitcoin's price fell from $80,000 to $77,000.
Oil prices rose after the U.S. struck missile bases again. This is intensifying inflationary pressure, and for risk assets, escalating external conflicts act as a negative factor, strengthening the drivers for interest rate hikes.
If US employment data is too strong, the Fed has no need to cut or freeze benchmark interest rates, which reinforces the possibility of rate hikes and acts as a negative for risk assets. Conversely, if employment data is too weak, concerns about an economic recession grow, which also becomes a negative for risk assets. Therefore, market participants view moderately poor employment data as the best-case scenario.
Immediately after Chair Powell's speech, there was much debate among market participants regarding the interpretation of his remarks. This added to market confusion until the tightening message was finally confirmed.
Chair Powell positively assessed the employment situation as 'nothing could be better,' but non-farm payrolls actually showed a sluggish performance for two consecutive months. This discrepancy between market expectations and the Fed's perception of reality has also been a factor raising the possibility of a rate freeze.
Last week, Bitcoin spot ETFs recorded net inflows of $920 million, a decrease compared to the $1.4 billion net inflows the week before. This is attributed to the impact of Chair Powell's hawkish remarks on the market.
Michael Saylor, Chairman of MicroStrategy, tweeted 'We are back' along with an image of an orange dot on Sunday, hinting at an additional Bitcoin purchase. Historically, such actions by MicroStrategy have tended to form short-term peaks.
MicroStrategy's preferred stock rose 2% compared to the previous trading day, exceeding $97, and at one point last week, it rose to $98, nearing its par value of $100. The common stock also showed a 21% increase, making the achievement of the $100 issuance threshold a key market concern.
Uniswap (UNI) coin saw an increase in price as the utilization of the Ethereum network grew on the Robinhood Chain. Uniswap's trading fee revenue expanded due to active memecoin trading, and a significant portion of the protocol's revenue is used for coin burning. These factors contributed to the rise in Uniswap's coin price.
As the fan-based nature of traditional memecoins disappears and purely speculative trading for price differences becomes prevalent, stock-based memetokens mimicking indices like the S&P are emerging. These 'memestock tokens' are tokens created as memes for actual stocks, mimicking the price fluctuations of specific stocks or indices and carrying a strong speculative nature. They are classified as high-risk assets that only move when liquidity is guaranteed.
Memetokens usually rise when large investors (whales) first buy a large quantity, pushing up the price. Then, retail investors chase the price, causing it to rise further, but since memetokens have no intrinsic value, they plummet immediately if a large holder sells. This follows a typical 'money-for-money' speculative mechanism.
Answers come from the transcript, with the exact spot cited.
Want the next one from this channel too?
When 삼프로TV 3PROTV publishes, we'll write it up like the one you just read and email it to you.
{channel} published 87 in the last 7 days.
We skip Shorts. You can unfollow any time.
