May 9th 2022
Macro uncertainty and stablecoin implosion – the perfect storm
A combination of macro uncertainty and the implosion of the algorithmic stablecoin UST has pushed the crypto markets deep down into red territory over the past seven days.
The bitcoin price fell 17% over the past seven days, seeing its sixth straight red week. ETH and BNB remain highly correlated with BTC and are both down 16% over the past seven days.
Last Wednesday’s FOMC meeting met expectations, announcing a 50bps rate hike and balance sheet normalization starting June. During the presentation, Jerome Powell announced that the FED is not actively considering a 75bps rate hike, leading equities and bitcoin to soar in the following hours. The tide quickly turned on Thursday, with both equities and crypto experiencing a further downfall.