Ethereum

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Milk

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James

Japan’s announcement to hike key interest rates by 0.25% led to a market meltdown that was made worse by the US unemployment figures. On Wednesday, the stock markets continue to trade in the green with Bitcoin surpassing $57,000.
Bank of Japan Deputy Governor Shinichi Uchida took a u-turn on August 7, stating that that the bank will not increase interest rates right now. The reason for the decision comes from the ongoing market instability after Japan’s Nikkei experienced the worst dip since 1987.
<h3 id="span-data-preserver-spaces-true-japan-s-decision-is-rejoiced-by-broader-markets-span">Japan’s decision is rejoiced by broader markets</h3>
Deputy Governor Shinichi Uchida was <a class="editor-rtfLink" href="https://jp.reuters.com/opinion/forex-forum/UXQISKB3IFNXTDPDF7DOXPTC2E-2024-08-07/" target="_blank" rel="noopener noreferrer nofollow">quoted stating</a>, “It will be necessary to firmly maintain monetary easing at the current level for the time being.” Uchida explained that worries about the US economy slowing down have hit the dollar and global equities. The deputy governor underlined that the exchange rate between the yen and the dollar has been unstable because many people who had invested in favor of a weaker yen are now changing their positions. He added that the instability has led to a larger drop in Japan’s domestic stock market.
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 Japan: We're increasing interest rates by 0.25%
 Markets: 🩸 🩸 🩸
 Japan: SIKE 😹🫵 <a href="https://t.co/bACtO1uSBM" rel="noopener noreferrer nofollow" target="_blank">pic.twitter.com/bACtO1uSBM</a>
 — Milk Road (@MilkRoadDaily) <a href="https://twitter.com/MilkRoadDaily/status/1821080510782992779?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow" target="_blank">August 7, 2024</a>
</blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Meanwhile, UBS reportedly <a class="editor-rtfLink" href="https://x.com/zerohedge/status/1821021483163865322" target="_blank" rel="noopener noreferrer nofollow">said</a> that the Bank of Japan is under pressure to respond to market reaction to its policy decision.
Economist Robin Brooks <a class="editor-rtfLink" href="https://x.com/robin_j_brooks/status/1820828038767988997" target="_blank" rel="noopener noreferrer nofollow">believes</a> that Japan’s efforts to influence its currency’s value didn’t have any real effect. He believes, “it was a policy error, driving a disorderly rise in the Yen. Policy makers should stay out of markets.” But in the last 24 hours, Bitcoin has risen by at least 2% based on <a class="editor-rtfLink" href="https://www.coingecko.com/en/coins/bitcoin" target="_blank" rel="noopener noreferrer nofollow">CoinGecko</a> data. The top crypto by market cap is still trading 14% down on a 7-day basis.
IntoTheBlock data shows bullish exchange and derivatives market <a class="editor-rtfLink" href="https://app.intotheblock.com/coin/BTC" target="_blank" rel="noopener noreferrer nofollow">signals</a> at press time. Crypto analyst on X, Ash Crypto, <a class="editor-rtfLink" href="https://x.com/Ashcryptoreal/status/1821073971724312933" target="_blank" rel="noopener noreferrer nofollow">predicts</a> a Bitcoin supply shock over the next 6-8 months that could be bullish for BTC price. However, the short-term market seems to be favoring Ethereum.
<h3 id="span-data-preserver-spaces-true-markets-buying-more-ethereum-than-bitcoin-span">Markets buying more Ethereum than Bitcoin</h3>
CoinShares’ Head of Research, James Butterfill, revealed in his research that since the market fall on Monday, investors have been avoiding Bitcoin and instead are <a href="https://x.com/jbutterfill/status/1821091733502877835" rel="noopener noreferrer nofollow" target="_blank">buying Ethereum</a>. As per the data shared, Bitcoin has seen an outflow of $165 million on a weekly basis, while Ethereum saw an inflow of $175.5 million. Overall, the market has seen net positive flows of $8 million this week, but a month-to-date (MTD) net outflow of $377 million. He also underlined that the price drop increased the ETF fund <a class="editor-rtfLink" href="https://x.com/jbutterfill/status/1820758444250476989" target="_blank" rel="noopener noreferrer nofollow">inflows</a> for Ethereum.
Meanwhile, just like the equities market, the crypto market will react to a rate-cut decision by the Fed. At the time of writing, the crypto <a href="https://www.cryptopolitan.com/market-rebounds-cardano-money-printing/" rel="noopener noreferrer nofollow">markets</a> seem to be overly reliant on monetary policy decisions.

Japan’s u-turn takes Bitcoin above $57K but investors favor Ethereum

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