OKEx Investment Research: The Federal Reserve does not consider negative interest rates, and the market value of stablecoins exceeds 10 billion US dollars
Written by: OKEx Investment Research
l The Fed made a big statement: negative interest rates are not currently considered
l The number of addresses in Ethereum is significantly reduced compared to Bitcoin
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Interpretation of hot news
【Federal Reserve made a big statement on the 13th: Negative interest rates are not currently considered】
On Tuesday, U.S. President Donald Trump said the U.S. should accept negative interest rates as long as other countries enjoy the benefits. He also said the U.S. should benefit from negative interest rates because investors would "pay" the U.S. Treasury for holding U.S. Treasuries.
In fact, the so-called "negative interest rate" refers to the Fed's actions against commercial banks, not against the majority of depositors. That is to say, even if the central bank lowers the guiding interest rate below zero, it will be difficult for commercial banks to pass on the same negative interest rate to the majority of depositors at retail outlets.
Facing the market's expectations and Trump's bombardment, the current Federal Reserve Chairman Powell made a statement on May 13: Negative interest rates are not what the Fed is concerned about, and the Fed intends to continue using the tools it has already tried.
Powell also said that the economic outlook is highly uncertain with significant downside risks. The suffering of many people cannot be fed back from economic data. Unemployment is likely to peak in the next month or so, with the virus raising concerns about long-term economic harm. The scope and speed of the recession are "unprecedented in history". The recovery may take time to gather momentum. The coronavirus shock appears to be the greatest ever.
Powell’s speech that night mainly expressed several points of view:
First, the Federal Reserve will not consider negative interest rates and will continue to use various current means to provide liquidity;
Second, the recovery of the U.S. economy, including the labor market, may be slower than imagined, and the economy still faces significant downside risks;
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Figure 1: 20171103 to 20200508 U.S. Unemployment Rate—Golden Ten Data
According to the Golden Ten data, the statistics of the U.S. unemployment rate from November 3, 2017 to May 8, 2020 are shown in the table above. The U.S. unemployment rate soared in the first quarter, and the latest unemployment rate rose to 14.7%, higher than the forecast of 16%. Value, the previous value was only 4.4%.
In addition, Goldman Sachs research report on Tuesday said that the peak unemployment rate in the United States may be as high as 25%, while the previous forecast was 15%. Goldman Sachs expects the unemployment rate to remain near 10% through the end of the year, close to the highs seen during the last recession.
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Data transaction tracking
[The number of addresses holding more than 10,000 Ethereum is greatly reduced compared to Bitcoin]
In the early hours of May 12, BTC completed its third production reduction in history. As of press time, the price of the currency has rebounded to above 9,000 from the bottom, and the cumulative increase has nearly doubled compared to the low point. It has also risen by almost 50% this year, but the number of addresses holding large amounts of ETH has decreased significantly.
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Figure 2: The number of addresses holding more than 10,000 ETH VS ETH price-Glassnode
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Figure 3: The number of addresses holding more than 10,000 BTC VS BTC price-Glassnode
OKEx Investment Research believes that the recent address changes of ETH and BTC are mainly due to the halving of Bitcoin block rewards. Some Ethereum users may have switched to Bitcoin, thinking that Bitcoin may have a price increase, leading to holding ETH The number of addresses decreased, while the number of addresses holding BTC increased.
[The market value of stablecoins has exceeded 10 billion US dollars, and the total market value of the encryption market has risen together]
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Figure 4: Comparison of market value of various stablecoins - Messari
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Figure 5: Total market capitalization of the digital currency market-Tradingview
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Currency market analysis
Currency market analysis
In the early morning of 5.12, after nearly half a year of continuous fermentation, the boots of the largest BTC production reduction this year finally landed. It has something to do with the news of production cuts being overdrawn in advance for a long time.
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Figure 6: OKEx BTC/USDT Spot Daily K-line Chart-AICoin
Risk Warning: The above content is for reference only and does not constitute investment advice.
Risk Warning: The above content is for reference only and does not constitute investment advice.
