Ethereum and Bitcoin are hurtin', here's what's up...
It's time for our bi-weekly(ish) checkin with the crypto markets.
...and we've come up with a formula for you.
If inflation rates or interest rate hikes are:
Higher than expected → the markets will probably go down.
On par, or lower than expected → the markets will probably go up.
If there is:
Uncertainty in the markets → prices will probably drop.
Certainty in the markets → prices will probably rise.
Today the inflation rate of food, energy, and other things we use in our everyday lives, showed an 8.3% rise since last year. That's down from 8.5% in July (hoooray!), but higher than the 8% that was expected (booo!).
And if you refer to the formula provided above, you'll know that higher than expected inflation rates means the markets will probably go down.
...which we've seen (Bitcoin is down about 9% since yesterday).
Also, the Ethereum Merge is due to take place in the next 24hrs or so (have you heard!?).
The Merge is kind of like 'The Boy Who Cried Wolf.' It's been promised and not delivered on for so long now.
(We've used this analogy a couple times now, but hey - third time's a charm).
Due to that history of broken promises, it looks like folks are having some last minute doubts on whether the Ethereum development team will deliver (even though everything is on track).
Uncertainty in the markets → prices will probably drop.
And just as the formula predicted, Ethereum is down 7% in the past ~24hrs:
Ok, doesn't look great - but remember: this is just for now. These short term reactions rarely affect long term growth.
For these factors to still have a hold on the market 1/5/10 years from now, would require sustained uncertainty and inflation/interest rate hikes.
While anything is possible (never say never), it's hard for us as humans (and the markets we create) to stay that consistent.
