The behavior of the digital asset market largely depends on the news background. Cointolab decided to figure out what kind of news crypto investors should pay attention to in order to keep abreast of the crypto industry.
What news to follow
News that can in one way or another affect the mood of participants in the crypto industry comes daily from a wide variety of sources. Among them, there are three areas that should be closely monitored.
Regulatory Solutions
Consider the thesis on the example of America. Against the backdrop of squeezing out miners from China, the United States has become the largest mining center. Also in America, a large number of crypto projects are concentrated. Members of the crypto community are showing interest in the United States, including due to the high level of readiness in the country of the legal framework for working with cryptocurrencies.
Due to the fact that the lion’s share of the crypto industry is concentrated in America, the decisions of local regulators affect the behavior of the entire digital asset market. For example, on June 15, 2022, the US Federal Reserve raised its key rate by 0.75 percentage points to a range of 1.5-1.75%. With this decision, the regulator responded to rising inflation in the United States. At the end of 2022, according to analysts, the key rate may reach 3.25-3.5%.
Against the backdrop of the publication of the Fed’s decision, bitcoin went into a fall.
Important! There is an opinion that the reaction of bitcoin to the increase in the key rate in the United States was partially included in the quotes of the cryptocurrency. The fact is that earlier in 2022, the Fed has already changed the indicator. In mid-March, the regulator raised the interest rate on federal loans by 25 basis points to 0.25-0.5% per annum. The increase was the sharpest in 28 years.
Many market participants, including analyst Michael van de Popp, believe that the behavior of Bitcoin, and therefore its altcoins, largely depends on the further decisions of the US Federal Reserve. Also, do not ignore the news of other US regulators.
Geopolitical arena
Events in the geopolitical arena, as the history of the movement of bitcoin shows, also affect the crypto market. Consider the thesis on the example of the aggravation of the conflict between the Russian Federation and Ukraine in February 2022. The market reacted to the events with a fall. Recall that Russia, like the United States, is one of the largest crypto centers.
American regulators believe that the conflict between the Russian Federation and Ukraine provoked an increase in inflation in the world. The fight against the consequences of the crisis could be one of the reasons for a significant decline in prices in the digital asset market.
Solutions of large companies
Often the decisions of large organizations set trends in the digital asset market. One of the most striking examples is Tesla. In February 2021, the electric car company announced a $1.5 billion investment in BTC, becoming one of the biggest investors in the cryptocurrency. Later, at the end of March, Tesla began selling cars for bitcoins. BTC met both news with growth.
On May 13 of the same year, the head of Tesla, Elon Musk, announced the suspension of the company’s acceptance of bitcoins. The businessman explained his decision by the negative impact of BTC mining on the environment. Bitcoin met the news with a fall.
Interesting! Many members of the crypto community believe Tesla’s resumption of bitcoin trading will help push BTC towards the $100,000 level.
Instead of conclusions
It turns out that a timely reaction to the news allows investors to earn.
