Since the Fed raised interest rates for the first time in March, the total size of the encryption market increased from $1.783 trillion on March 17 to $1.875 trillion on April 22, an increase of about 5.16%. BTC and eth have experienced the market of first rising and then falling.
According to the analysis of the encryption industry data annual report previously released by okcloud chain, the external factors affecting BTC are mainly inflation, fiscal policy, supervision and so on. This time, it is pointed out in the 2022 Q1 encryption Industry Report of okcloud chain that in addition to the above factors, Q1 crypto is mainly affected by two external factors: Monetary Policy & geopolitics, which is fully proved by the changes in market conditions after the interest rate hike of the Federal Reserve and the outbreak of the conflict between Russia and Ukraine.
Federal Reserve raises interest rates and shrinks the table, increasing the correlation between encryption market and monetary policy
In fact, as early as before the Federal Reserve's interest rate meeting on January 26, the uncertain expectation of interest rate increase at that time brought obvious negative sentiment to the market. The trend of encrypted asset market fell for days, and BTC fell as much as 20.86% compared with the beginning of the year. However, since the results of the interest rate meeting did not exceed market expectations, and the previous fluctuations in the market had fully digested the emotional impact of the interest rate increase, when the boots of the Fed's first interest rate increase landed in March, the market immediately ushered in a wave of make-up market.
It is noteworthy that in this round of interest rate hike cycle, there is widespread concern about the pace of interest rate hike by the Federal Reserve, which may not digest the market expectations caused by the table contraction. Combined with the digestion time and market performance of the Fed's table contraction in 17 years, if this round of table contraction really starts in May as currently expected, it may have a certain impact on the encryption market due to insufficient market digestion.
Based on the data performance of the first interest rate hike in the encryption market this year, Ouke cloud Chain Research Institute believes that with the scale and mainstreaming of the encryption market, its correlation with national regulators and the monetary policies of the central banks of major countries such as the United States is gradually related, but these are not the decisive factors affecting the trend of the encryption market for the time being, and will only affect market expectations in the short term.
In addition, although the increase of uncertainty risk led to the bottom of BTC twice, it did not prevent institutions and listed companies from continuing to increase their holdings of BTC.
According to the 2022 Q1 encryption Industry Report of orco cloud chain, MicroStrategy held 129218 BTC as of 2022 Q1, which even exceeded the market value of MicroStrategy and was three times the position of Tesla, the second largest BTC among listed companies. BTC is recognized by some enterprises as an important asset composition in the company's balance sheet, and the trend of increasing holdings is obvious.
Russia Ukraine conflict broke out and the encryption market continued to change. Okcloud chain reminded us to pay attention to risk prevention
In addition to the impact of the Fed's interest rate hike, the Russian Ukrainian conflict and the Luna Foundation's purchase of BTC as a reserve asset also had an important impact on the encryption market.
With regard to the relationship between the Russian Ukrainian conflict and BTC, Ethereum and other encrypted assets, okcloud chain pointed out that in the Russian Ukrainian conflict, the encrypted community spontaneously donated to Ukraine through encrypted assets. Subsequently, Ukrainian officials also developed the wallet address on the chain to accept more encrypted asset donations; Before the outbreak of the conflict, Russia began to seek to recognize the legal status of encrypted assets, and after the outbreak of the conflict, in order to get rid of US dollar sanctions, Russia expressed its willingness to consider accepting the settlement of international natural gas transactions with encrypted assets such as BTC. This news also significantly changed the trend of BTC on that day.
According to the data reported by the encryption industry of okcloud chain 2022 Q1: at the macro level, BTC fell twice in 2022 Q1 due to the uncertainty risk caused by two external factors: monetary policy and geopolitics. In terms of data on the chain, the outflow rate of BTC from the exchange slowed down in the first quarter, and the inflow of stable currency pulled the trend back. According to the background data statistics of oklink chain masters, from January 1, 2021 to March 31, 2022, the net inflow of exchange addresses usdt, usdc and bus was $18.567 billion, with a peak of $24.022 billion, accounting for 19.3% of their new supply.
From the perspective of the overall situation, at the beginning of January 2022, the number of stable coins in the exchange began to decrease, the capital shortage and purchasing power weakened, and then the stable coins began to flow rapidly into the address of the exchange. However, after mid February, the stable coins in the exchange once again had a net outflow of stable coins for many consecutive days, resulting in a shortage of funds. Eurocloud chain reminded us to pay attention to risk prevention.
new growth points in the encrypted asset market may appear, and the blockchain application will be further expanded
In the face of many uncertain factors such as monetary policy and geopolitics, the development of encryption market will continue to change in 2022. From the data on the chain, okoyun chain believes that cross chain bridge, defi market, derivatives track and lightning network may become a new growth point of encryption market in 2022. As a leading enterprise in the field of blockchain in China, in the face of the application and development of blockchain data in the encryption market, okcloud chain also continues to innovate in the application of blockchain technology.
For example, oklink browser of okcloud chain launched usdt aggregation browser, which supports eth, TRX and omni chains, while okcloud chain master launched workbench function, upgraded from read-only to read-write, and launched 79 new indicators, covering 133 independent indicator types and 6 public chains; On the four difficulties of blockchain crime, orco cloud chain launched SkyEye pro2 0. Integrating blockchain + big data technology, three major innovation breakthroughs have been achieved. Make full use of blockchain technological innovation to escort the ecological security of blockchain.
At present, most of the data cores on the chain focus on transaction data. Oko cloud chain protects the ecological security of the blockchain by labeling and fine analysis and judgment of the data on the chain. With the continuous changes in the encryption market, okcloud chain will also continue to pay attention to and combine the data advantages on the enterprise chain, deeply insight into the significance behind the data changes, and use blockchain technology innovation to boost the development of the encryption market.
