BlackRock Issues ‘Unprecedented’ Fed Warning After $300 Billion Bitcoin And Crypto Price Crash
Gold and Silver have been tested through hundreds of recessions, wars, revolutions. Crypto untested, has not been through any recessions
Bitcoin Prices Plummet: A $300 Billion Wipeout as Fed Warnings MountThe crypto market, with a combined value of over $1 trillion, has witnessed a significant downturn since early June, erasing $300 billion in value. This decline comes as the market braces for a potential $4 trillion turning point.
The bitcoin price has plunged from over $70,000 per bitcoin earlier this month, as traders scramble to readjust following a stern Federal Reserve interest rate warning from Treasury secretary Janet Yellen.
One bitcoin and crypto luminary anticipates a major shift from China, while BlackRock analysts have issued a stark warning of an "unprecedented" scenario that could negatively impact the bitcoin price and crypto market.
BlackRock CEO Larry Fink's endorsement of bitcoin has significantly contributed to its surge this year.
However, the bitcoin price has also faced challenges from bitcoin miners selling their bitcoin to cover expenses following the halving event in April, which reduced the block reward from 6.25 bitcoin to 3.125 bitcoin."Central banks are compelled to maintain higher interest rates than pre-pandemic levels to combat persistent inflationary pressures," BlackRock analysts, who have spearheaded a bitcoin price boom this year by leading the charge on Wall Street's spot bitcoin ETF revolution, stated in a report."
The new macroeconomic landscape is characterized by higher inflation, higher interest rates, and lower growth due to supply constraints. We anticipate this unprecedented macroeconomic cocktail to persist. Demographic aging, the reconfiguration of global supply chains, and the low-carbon transition are all constraining production and driving capital investment as economies adapt."Last week, the Federal Reserve opted to keep interest rates unchanged and hinted at only one rate cut in 2024, with further reductions expected in 2025. At the start of 2024, the market had projected as many as seven interest rate cuts this year.
The Fed has faced pressure to lower interest rates after raising them at an unprecedented pace following massive Covid-era stimulus spending and money printing that fueled inflation.Last week, three Democratic senators, led by influential Massachusetts senator Elizabeth Warren, urged the Fed to reduce interest rates and abandon its 2% inflation target."We write today to urge the Federal Reserve to lower the federal funds rate from its current, two-decade-high of 5.5%," the senators penned in a letter to Fed chair Jerome Powell.
"This prolonged period of high interest rates is already slowing the economy and failing to address the primary drivers of inflation."
The bitcoin price has rebounded to its all-time high of around $70,000 per bitcoin this year, largely due to BlackRock's massive new spot bitcoin ETF.
However, the bitcoin price has also faced pressure from bitcoin miners selling their bitcoin to cover expenses following the halving event in April, which reduced the block reward from 6.25 bitcoin to 3.125 bitcoin."The recent bitcoin price decline was also influenced by high selling volumes from miners," Matteo Greco, research analyst at crypto and financial technology investor Fineqia, noted in an emailed statement."
This event forced miners to optimize their capital efficiency to maintain profitability, initially causing a significant decrease in profitability as rewards are halved from one block to the next. Furthermore, the bitcoin network's hashrate has significantly increased over the past few years and has only decreased by 4% following the halving. This suggests strong competition in the mining sector, with businesses compelled to find various revenue streams to stay profitable and optimize capital efficiency.
Jon Little, a renowned and controversial figure in the precious metals industry, has expressed concerns about the resilience of Bitcoin and other crypto products. He points out that these assets have never been tested in a recession, which is a significant risk factor to consider.
Jon Little further elaborates on the risks, stating that we are not only facing traditional forms of warfare with countries like Russia and China, but also a new frontier-cyber warfare. This type of warfare, he warns, could potentially disrupt crypto ledgers, rendering cryptocurrencies temporarily or permanently inaccessible.
Little said to our reporter, "Hacking is the new Trojan Horse; Crypto is the riskiest asset in these times.”
Little concluded by stating, “Yesterday I was visiting with my friend Bob Moriarty, and we discussed that Russia need only send one blast our way from Cuba. An ICBM exploding high above Wichita, Kansas, would create an Electro Magnetic Pulse, which knocks down, eliminates, or freezes the internet. In this event, Gold and Silver will still shine in the candlelight while Bitcoin is wiped out.”
Citations:
[1] https://www.forbes.com/sites/digital-assets/2024/06/18/blackrock-issues-unprecedented-fed-warning-after-300-billion-bitcoin-and-crypto-price-crash/
[2] https://www.blackrock.com/uk/solutions/insights/scam-notice
[3] https://www.blackrock.com/corporate/compliance/scams-and-fraud
[4] https://www.blackrock.com/us/individual/resources/customer-service
[5] https://corporateaccountability.org/blog/blackrock-for-2022-corporate-hall-of-shame/
[6] https://www.washingtonpost.com/business/2023/05/06/blackrock-esg-climate-woke/