The Bank of Japan may raise interest rates this week, causing Bitcoin to drop to 88K

Broadcom’s disappointing sales outlook led to an 11% plunge in its stock price, further fueling investor concerns over bets on artificial intelligence. U.S. stocks retreated last Friday (12/12) from their all-time highs. With the Bank of Japan (BOJ) potentially raising interest rates by one basis point after the December 19 meeting to bring the baseline rate to 0.75%, the first rate hike cycle since January resumes. Market worries about yen carry trade unwinding pressure have put pressure on the cryptocurrency market. Bitcoin (BTC) fell from 93K last Friday to above 88K this morning, while Ethereum (ETH) also dropped below $3,000. The overall market cap of cryptocurrencies declined by 1.8% to $3.02 trillion.

The Federal Reserve is expected to cut rates by only one basis point next year, and Broadcom’s earnings report has triggered market selling pressure.

Broadcom’s disappointing sales outlook caused this chip manufacturer’s stock to plunge 11%, dragging down competitors and further heightening investor concerns about artificial intelligence bets. U.S. stocks retreated last Friday (12/12) from their all-time highs.

(Broadcom( Q4 earnings beat expectations! After landing a billion-dollar deal with Google TPU, stock price declined)

The market enthusiasm sparked by the Fed’s third consecutive rate cut was dampened by a wave of selling. Additionally, according to the dot plot, Fed officials expect only one rate cut by 2026, which confuses investors.

Beth Hammack, President of the Cleveland Fed, stated she favors slightly tightening rates to continue exerting pressure on still-high inflation. Following this news, the U.S. 30-year Treasury yield rose 6 basis points to its highest level in three months.

Jeff Schmid of the Kansas City Fed also pointed out that consumer prices face pressure; he opposes the Fed’s decision to cut rates this time because inflation remains too high and economic growth momentum remains strong.

Investors seek diversification, and investment banks remain optimistic about the stock market next year.

For most of this year, tech giants led the stock market rally, but now concerns over overvaluation and large capital expenditures are prompting investors to look for alternative opportunities.

Goldman Sachs analyst Mark Wilson believes diversification has become a necessary cost for maintaining stock investment sufficiency. Attractive investment opportunities are found in Korea, Japan, China, and broader emerging markets.

At the same time, Goldman Sachs expects the stock market to hit new highs again next year, supported by robust economic growth and broader adoption of artificial intelligence. Other firms, including Morgan Stanley, Deutsche Bank, and Royal Bank of Canada, also forecast U.S. equities will rise over 10%.

Market analysts are generally optimistic about Europe. Among 17 strategists surveyed by Bloomberg, none expect a significant decline in European stocks.

Due to the absence of recent adverse factors, Ecofi Investissements fund manager Karen Georges stated that many investors are expecting stock prices to rise during Christmas.

Investors are eager to buy lagging stocks this year, making it a good time to diversify portfolios.

The Bank of Japan may raise interest rates this week, and Bitcoin dropped to 88K

As the Bank of Japan )BOJ( possibly raises rates by one basis point after the December 18-19 meeting, the baseline rate will increase to 0.75%, marking the first rate hike cycle since January. Market concerns about yen carry trade unwinding pressure have pressured the crypto market.

Bitcoin fell from 93K last Friday to above 88K this morning, with 24-hour liquidation worth $220 million, mostly in Bitcoin long positions.

Ethereum also dropped below $3,000, and the overall crypto market cap declined by 1.8% to $3.02 trillion.

This article “Bank of Japan may raise rates this week, Bitcoin drops to 88K” first appeared on Chain News ABMedia.