Yesterday the fed cut rates by 25 points which is pretty much what everyone was expecting. However the stock market seemed to not take too kindly to it falling nearly 3% across the board and that was only in the last few hours of trading making some believe come tomorrow markets will sink as well.
We can almost start to look to the crypto market for answers now as well. Since it's a 24/7 traded "stock" pretty much we have seen it tank as well even after the closing of markets. I can't believe I'm even going to say this as a bad thing right now with BTC trading at just over $100,000 well off it's highs and down a rather drastic amount of 7%+.
Why The Crash
While we can't really call it a crash yet it's for sure sending out some gitters in the overall market as people feel we have hit an all time high bubble in not only the stock market but also the crypto markets.
When price to earning ratios where this high on stocks we have seen massive crashes happen soon there after. But will "this time be different" being that a very pro crypto president is stepping in could things change?
Well it's possible if things get really shaky in the stock market we could potentially see people pour over into crypto as a means to store value while the market corrects itself. But with some cryptos tied to stocks now as well it begs the question if they will also have a negative impact on the asset now.
Inflation Numbers
The rate cut right now really doesn't make sense as inflation is still higher than what it should be. However it's starting to feel like people are getting more normalized with higher inflation rates over 2% which is NOT A GOOD THING at all!
You see inflation shouldn't even exist. The price of items should actully come down with innovation and automation yet we continue to see things get more and more expensive. Inflation is a made up thing by the government and honestly should be totally abolished! But I'll save the details on that for another day and another post lol.
What We Expect With Bitcoin
What we are expecting with bitcoin come 2025 is a very talked about and bullish market where companies and maybe even governments begin to stock pile into it. Now that being said we have seen this take place in the past and not really move the needle much. It all comes down to how many are buying and if they are holding as the mined amount of bitcoin is rather low in terms of emissions into the market.
I personally think the next 4 years will be some of the best for bitcoin. However after that things could change from quantum computers, other blockchains, more ETFs for other assets and global war and shifts in the sand.
Projection
Reports are run just like any business and the fed is the same. One of those reports is a projection report which outlines a general idea as to where things could go and what is being planned for.
In 2025 it's expected to have lower rate cuts then expected. In 2025 rates are only expected to go from 4.4% to 3.9% which is only another 50 basis points. 2026 another 50 basis points to 3.4% and in 2027 3.1% with a end goal of 3%.
As we all know though what you expect and what actully happens are almost always the complete opposite. For example I've been sitting on some cash from dividends for a while so I invested it into the VTI ETF yesterday. Well now it's down 3% lol
Posted Using InLeo Alpha