Kritika Mehta
Financial analyst and well-known Bitcoin (BTC) critic Peter Schiff has once again raised alarms about the state of the financial markets. In a series of posts on X, Schiff emphasized the precarious situation facing both traditional markets and cryptocurrencies. In addition, he weighed in on the Federal Reserve monetary policy.
Peter Schiff Predicts Crypto & Stock Crash
“Markets are sounding an alarm. #Stocks are selling off. Safe haven currencies like the Japanese yen and Swiss franc are rising while commodity currencies like the Australian dollar are falling. If the #Fed doesn’t cut rates soon, the #recession may start with a stock market crash,” Peter Schiff warned on X. This statement comes amid a backdrop of significant market volatility, with the economist pointing to the Federal Reserve’s potential role in averting a deeper crisis.
In addition, Peter Schiff’s observations extend beyond stocks. “Gold and silver are selling off too. The markets are about to price in a hard landing. The key is, will the #Fed allow that to happen, or will it deliver the one thing that can stop a full-blown stock market crash, including a financial crisis and recession before the election?” he questioned.
In the crypto realm, Schiff highlighted the recent decline in Bitcoin and Ethereum despite the launch of eight Spot Ether ETFs. “In case you haven’t noticed, despite yesterday’s launch of 8 #EthereumETFs, #Ether is already down over 7% in the past 24 hours. #Bitcoin is down too, falling 2% over the same time period.”
Moreover, Peter Schiff concluded, “The stage is set for a #crypto crash, just in time for the Nashville Bitcoin conference,” he noted. This drop in crypto prices adds to the growing unease among investors. Furthermore, his comments reflect a broader concern that without a rate cut, the economy might face a severe downturn.
Fed Rate Cut Probability
Hence, the upcoming Federal Open Market Committee (FOMC) meeting on July 30-31 could be pivotal. If the Federal Reserve considers the ongoing market dynamics and decides to cut interest rates, it could provide a much-needed boost to high-risk assets like Bitcoin and other cryptocurrencies.
Historically, lower interest rates tend to encourage investment in such assets. However, according to the CME FedWatch tool, the probability of a 25 basis points Fed rate cut in July is a mere 10.9%. In contrast, the likelihood of a similar rate cut in September stands at 76.7%.
Also Read: Why Is Bitcoin Price Falling Today?
Japanese Yen & Crypto Liquidations
The Japanese yen has surged to its highest level in two months against the US dollar, indicating a potential narrowing of the interest rate differential between the two countries. This stronger yen has negatively impacted Japanese exporters, pushing the Nikkei 225 index into a technical correction.
The yen’s strength has introduced additional volatility across global markets. Moreover, gold and Bitcoin registered significant liquidations. Gold has entered a sharp correction, dropping 1% to 2374.85 per ounce at the time of reporting. In addition, Silver has also seen a steep decline, down 4.04% to $27.73 per ounce. These corrections reflect broader market instability, exacerbated by the yen’s appreciation.
In the cryptocurrency market, the 24-hour liquidation figure has reached $293 millio. Out of this, long positions accounted for $266.60 million and short positions for $26.40 million. In addition, $82.9 million in Bitcoin long positions have been liquidated in the past 24 hours, according to Coinglass.
Thus, investors are closely monitoring the yen’s strengthening to gauge future market movements amid Peter Schiff’s warnings. Meanwhile, the Bitcoin price has fallen 3.47% to $64,234.54 at press time on Thursday, July 25. This decline is partly attributed to the recent distribution of assets by Mt. Gox to its creditors, increasing selling pressure in the market.
Also Read: Russia Duma Passes Bill To Legalize Bitcoin Mining & Crypto Payments
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
