The past week has been intense for cryptocurrencies, and intricate details were shared days in advance. As interest rates are set to decrease, Bitcoin 
$90,533 and altcoin prices remain unsatisfactory. The QCP Capital report released today sheds light on the factors suppressing prices and reversing ETF flows.
The Significance of Fed’s Independence
Established 55 years ago, the independence of the Federal Reserve marked the onset of a new central banking era. The global economy transitioned into a different phase post-war, prompting discussions on the Fed’s lack of initial independence and how it evolved. The report explored the significance of long tenures of Fed members, together with other pivotal insights.
A report suggested that Fed member Cook might be dismissed by Trump, and, subsequent to its release, the expected action was taken. However, the issue was judicially contested, indicating a battle anchored on the “Fed’s independence.” This scenario poses a significant risk to cryptocurrencies.
Insights from QCP Capital
The analysts’ assessment shared today navigated the focus of September. As many deliberated on why the anticipated rate cut nearly a year later did not adequately impact cryptocurrencies, analysts suggested otherwise:
“In September, the spotlight will not be on rate cuts but rather on Fed’s independence. Indicators point to higher forward premiums, a lower USD decline threshold cycle, a steeper curve, and the support for gold and BTC as hedge instruments. The risk focus at Jackson Hole shifted due to a cooling labor market, maintaining the chance of rate cuts in September. This year, two rate cuts seem plausible; monitor critical points and inflation expectations fueled by tariffs. Should global growth persist, USD may weaken from this juncture. Are you prepared for USD weakening and strengthening of hedging tools?”
As gold reaches new record highs, QCP Capital believes that the discussions surrounding Fed’s independence may not yield long-term effects on cryptocurrencies.
The Russian Conundrum
Last week, Trump issued an ultimatum promising actions if no progress was made regarding Ukraine. The NY Post reports that the U.S. expects Europe to cease buying Russian oil and support proposed sanctions. However, President Putin’s recent announcement to supply over 100 billion cubic meters of gas to China, alongside Trump’s secondary sanction threats, raises questions about America’s perceived irrelevance. Given that China is the major buyer of Russian oil and India is second, facing higher U.S. tariffs as a result, how will China proceed with this deal despite Trump’s threats? As tensions rise, cryptocurrencies might experience heightened volatility this September.
