- Bitcoin jumps above $57,000, boosted by Bank of Japan Governor Shinichi Uchida’s statement about potentially pausing rate hikes if global market instability increases.
- Economist Peter Schiff criticized the Bank of Japan’s potential pivot on rate hikes, warning of hyperinflation risks and the dangers of the carry trade continuing indefinitely.
The Nikkei Index 225 continued its rally on Wednesday, August 7, surging by another 2.55 and moving past 35,000 levels. Earlier today, the Bank of Deputy Governor Shinichi Uchida said that they would consider pausing the central bank’s rate hike decision if the global market instability rises further. This statement provided the much-needed catalyst for rallying risk-ON assets like equities and crypto.
The Bitcoin price has risen by 4.095% in the last 24 hours and is currently trading at $57,170, with a market cap of $1.12 trillion. According to the CNF update, if bulls manage to hold above the $57,000 level, the BTC price could reach $60,000.
The rate hike last week resulted in a sharp surge in the Yen’s value, which resulted in a major unwinding of the Yen carry trade while sending the global markets into a downward tailspin. Furthermore, concerns about a US recession and the sky-high valuations of tech stocks led to a $6.5 trillion rout from the global equity markets on Monday.
With the Bitcoin price bouncing back above $57,000, analysts are saying that the worst could be behind us. CryptoQuant CEO Ki Young Ju said that As long as the Bitcoin price stays above $45,000, the bull market remains intact, and Bitcoin could be eyeing fresh all-time highs within a year, per the CNF update.
As long as the #Bitcoin price stays above $45K, it could break its all-time high again within a year, imo.
Some indicators are showing bearish signals. However, they could still recover with a rebound, so we need to watch if it stays at this level for a week or two.
If it… https://t.co/FnqafcQcjp pic.twitter.com/fJiM2btQeF
— Ki Young Ju (@ki_young_ju) August 6, 2024
Peter Schiff Warns Japan of Hyperinflation Risks
Popular economist Peter Schiff criticized the Bank of Japan’s decision to pivot very soon. He said that the central bank should be worried about market turmoil since it’s impossible to raise interest rates without destabilizing the markets. He added that inflation would go on a toos if the BOJ pivots, ultimately forcing the central bank to aggressively hike rates, thereby forcing the market to crash. Schiff added:
Instead of the Fed doing an emergency rate cut, the BOJ did an emergency suspension of future rate hikes. Now the carry trade can live on indefinitely. Of course, the longer it’s allowed to continue the worse it will be when it has to be abruptly ended to prevent hyperinflation.
On the other hand, Japan’s top financial regulator, the Financial Services Agency (FSA), said that it is considering allowing cryptocurrency exchange-traded funds (ETFs) in Japan. Hideki Ito, the FSA commissioner, said that many people believe crypto-assets “do not necessarily contribute to the wealth creation of the Japanese people in a stable and long-term manner.”
On the other hand, Japan’s Metaplanet continues to buy Bitcoin by raising an additional $70 Million, per the CNF report.
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