This week has brought on a sea of red as crypto prices fell across the board.
This week has brought on a sea of red as crypto prices fell across the board. Bitcoin is down 14% week-on-week to $40.6k, reversing March's hard-fought gains. The sell-off reflects a wider market trend as risk-on assets, predominantly crypto and stocks, bear the brunt of uncertainty surrounding how the Fed might respond to escalating macro developments. The Crypto Fear & Greed Index is as low as it has been since January.
Earlier this morning, the US Bureau of Labor Statistics released last month's inflation figures reaffirming that inflation is continuing to spiral. Year-on-year CPI is up to 8.5%, Core Inflation (CPI minus food and gas) is up to 6.5%. But the uncertainty stems from fear of impending economic shocks emanating from the war in Ukraine: some macro analysts suspect that, despite roaring inflation, the Fed may have to abandon monetary policy tightening to protect economic growth. In particular, the health of the corporate credit market is something that the Fed will be monitoring attentively — a deterioration could trigger a monetary policy response.
The 14-day moving average network hashrate, 201 EH/s, is the same as this time last week as network growth continues to tread water well below most analysts' 2022 expectations. Difficulty is unadjusted from last week at 28.6T; it is expected to decrease by 1.3% to 28.2T on Thursday. Sliding bitcoin value has meant a drop off in hash price, currently $0.18, as miners see March's margin boost to be short-lived. Given the stagnation in network growth, what happens next to hash price will be driven by bitcoin price — and ultimately the Fed's coming course of action.
In other news, there are exciting changes behind the scenes at Raft. Stay tuned for the announcement next week. In the meantime, happy mining!