Crypto: Week of Truth with the Fed and Global Inflation

This week is likely to shake the financial markets like a cocktail shaker. With the release of the Fed’s minutes, inflation figures in Japan and the UK, and the results of key crypto companies, volatility could reach new heights. Bitcoin won’t escape this: Semler Scientific, which bets everything on cryptocurrency, and Riot Platforms, a major player in mining, will release their quarterly performances. Suffice it to say that traders are going to have cold sweats.

The Fed Faces the Inflation Dilemma

On Wednesday, the American central bank will open its notebook. Investors hope to read between the lines the Fed’s strategy against inflation, which is holding strong. Since the latest data exceeded expectations, markets doubt the Fed’s willingness to lower rates quickly.

And if the institution shows a cautious tone , it could well dampen investor enthusiasm, who were counting on a more accommodative policy to support risky assets, including bitcoin.

As Ryan Lee, chief analyst at Bitget, points out:

“Changes in interest rate policies can significantly affect Bitcoin and digital assets; lower rates drive investment towards cryptocurrencies for higher returns, while higher rates deter investment due to increased borrowing costs and better yields elsewhere.“

Weeks shortened by holidays, like this one in the United States with Presidents’ Day, are often synonymous with reduced trading volumes. Translation? A single statement a bit too forceful in the Fed’s minutes could trigger violent jolts in the markets, including on BTC.

Inflation: The UK and Japan in Turmoil

While the Fed takes the spotlight, inflation is causing disruptions elsewhere . In January, prices surged in the UK and Japan, forcing their central banks to revise their plans.

• In the UK, consumer prices reportedly jumped 2.8% year-on-year, a blow to the Bank of England, which hoped to take a breather;
• New taxes on private schools and rising plane ticket prices didn’t help matters;
• The Bank of Japan, on its part, sees its inflation reach 3.1%, an unprecedented level in 17 months;
• To calm frayed nerves, the Japanese government is unleashing a radical solution: releasing 210,000 tons of rice from its reserves to curb the rising food prices.

If these inflationary tensions persist, they could delay monetary easing policies and, by extension, complicate the task for crypto investors.

Bitcoin: Semler and Riot in the Spotlight

In the crypto world, two players are capturing all the attention: Semler Scientific and Riot Platforms.

Semler, a company previously unknown, is making waves with its massive bitcoin buying strategy. Between January 11 and February 3, it acquired 871 BTC for $88.5 million, bringing its total stock to 3,192 BTC. Enough to overshadow MicroStrategy.

Its stock is attracting investor interest, as PaxB recently stated:

“I am strengthening my position on $SMLR. It’s a good deal, it saves in Bitcoin and remains undervalued.“

On its part, Riot Platforms, the mining giant, will unveil its results on Saturday. Analysts anticipate a loss of $0.18 per share, a significant improvement compared to the -$0.54 from the previous quarter. But Riot has a history of defying predictions: over the last 12 months, it has exceeded expectations half the time. A positive surprise could give BTC a boost.

All of this only confirms that macroeconomic winds are blowing hard on Bitcoin. The Fed, inflation, and major crypto players will play a crucial role this week. As a colleague reminded us, five factors could either make BTC explode or collapse in the coming days. Beware of the shocks!