Ethereum (ETHUSD)

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WHAT IS GOING ON? 📉
BREAKING: Bitcoin plunges below $50,000, ether under $2,200 amid Jump Crypto moves, US election uncertainty

Bitcoin
Everything is f*cked…

It’s rough out there…

Everything is crashing, not just Bitcoin and crypto…

The recent crash accelerated on Sunday, sending Bitcoin back to levels not seen since February.

And Ethereum plunging to prices not seen since December.

But what caused this crash?

Well, the Bank of Japan (Japan’s central bank) is to blame…

japan
Last week, The Bank of Japan raised interest rates from a range of 0% - 0.1% to 0.25%.

This resulted in the Japanese Yen shooting higher and the stock market tumbling.

Increased rates in Japan also resulted in the USD-JPY carry trade unwinding…

Now this is a pretty complex topic but here’s a quick breakdown on how it works:

An investor borrows in a currency with low interest rates, such as the yen, and reinvests the proceeds in a currency with a higher rate of return. (like USD)

If you’d like to learn more about the carry trade, click here to watch an excellent explanation.

liquidations
This unwinding of the JPY-USD carry trade eventually found its way to the US, where the stock market began to collapse.

watcher guru
But according to Hunter Horsley, clients aren’t panic selling.

Hunter Horsley
Nothing has changed about the thesis for Bitcoin and crypto.

In the next section we’ll discuss whether the Fed missed the mark on monetary policy.

Should they have cut rates at the last FOMC?

We think so.