Bitcoin Slumps Almost 10% as All Eyes Are on FOMC Meeting Tomorrow Evening

GB Market Commentary 14/12/2021

by Marcus Sotiriou

Bitcoin fell by almost 10% yesterday as all eyes are on the FOMC (Federal Open Market Committee) meeting taking place at 7pm this evening, which many are expecting to be a bearish event for risk on assets like crypto. Fed officials will give details of monetary policy adjustments amid rising inflation and a strengthening economy. Economists at Deutche bank said, "we expect the Fed to announce a doubling in the pace of tapering at the December FOMC meeting.” I think that this key macro event could result in a pump for Bitcoin’s price because selling has already occurred in anticipation of the event so the downside effects may be priced in.

The largest online bank in Switzerland, Swissquote, is launching its own cryptocurrency trading platform. They received a surging demand for cryptocurrencies this year as their “compliance and customer service teams were almost overrun by the crypto rush.” Furthermore, it has been announced that Mubadala, the UAE Sovereign Wealth Fund, will start investing in crypto with $250 billion of assets under management. This isn’t the first Sovereign Wealth Fund to invest in crypto as Singapore’s government have been buying Bitcoin for their Sovereign Wealth Fund for at least a year, and I do not expect Mubadala to be the last. This involvement from major financial institutions and governments suggests that Bitcoin will not see a multi-year bear market before the next halving in 2024, which occurred in previous crypto market cycles.