Wednesday, November 30, 2022

Warren Buffett takes refuge in US Treasury bills and warns bitcoin investors

Meanwhile, unprofitable assets such as gold and bitcoin have lost around 2.5% and 57% since August 2021. The US stock market benchmark index, the S&P 500, also saw a decline of around 7.5% over the same period.

Buffett’s strategy with the Treasury suggests the same thing, namely a bet on further declines in short-term risk assets, especially as the Fed prepares for more rate hikes.



Two reasons to think about potential downside

this Tuesday, cryptocurrency They take a break this Tuesday after falling 2% the previous day. Bitcoin He recovers a bit while struggling to stay at $21,000. This Tuesday’s rise of up to 4% is led by Ethereum – which managed over $1,600 – Solana and Cardano.

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Bitcoin neared its all-time high of $69,000 in November 2021, more than three times the asset’s current price, and has not stopped falling since, with the Federal Reserve (Fed) likely at this last opportunity to spur an impulse. It has tightened its stance to control inflation.

Bitcoin’s rally that began to take shape since June coincides with growing investor expectations that inflation has reached its peak and that the Federal Reserve will therefore begin cutting interest rates from March 2023.

Even then, Most bankers expect rates to reach 3.75% by the end of 2023before falling back to 3.4% in 2024. Jackson Hole has a meeting this week, so any statement could shake the stock market as well Cryptocurrency.

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Unless the market predicts that interest rates in the US will stabilize, the red numbers could continue to punish growth stocks and cryptocurrencies.

Another headwind is the dollar’s strength against most currencies, with the indicator hitting its highest level in more than a month. “In bitcoin’s short existence, it has had a relatively strong inverse relationship with the DXY Dollar Index,” said Sean Farrell, Digital Asset Strategist at Fundstrat.

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