Casey Wagner

Cryptocurrencies fell and US equities slid Tuesday during pre-US market trading as participants braced for Wednesday’s update from the Federal Reserve.&nbsp;



Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) lost 8% to trade around $62,500, according to Coinbase. The largest cryptocurrency is now down about 17% from the all-time high set earlier this month.&nbsp;



Analysts say it’s not time to panic just yet, though, as a 20%-30% decline is typical for bitcoin after posting a record-setting price.&nbsp;



Ether (<a href="https://blockworks.co/price/eth">ETH</a>) also extended its selloff, dipping around 11% Tuesday to trade around $3,200, per Coinbase.&nbsp;



The S&amp;P 500 and Nasdaq Composite futures lost 0.4% and 0.5% Tuesday morning, respectively, ahead of the open, after the indexes both closed higher Monday.&nbsp;



The Fed’s policy-setting meeting wraps Wednesday. While markets are overwhelmingly anticipating the <a href="https://blockworks.co/tag/federal-reserve">central bank</a> to hold interest rates, traders will have their eyes on forward guidance.&nbsp;



Read more: <a href="https://blockworks.co/news/banking-sector-uncertainty-crypto">What banking sector uncertainty could mean for crypto markets</a>



“In December, [the Fed] guided toward 3 rate cuts this year,” Joseph Wang, chief investment officer of Monetary Macro LLC, said Tuesday during a panel discussion at the Blockworks <a href="https://blockworks.co/event/digital-asset-summit-2024-london/home">Digital Asset Summit</a> in London. “But between then and now, inflation has been a bit higher than expected.”&nbsp;



Until recently, markets were pricing in as many as five to seven rate cuts before the end of 2024, Wang added, but recent data is no longer suggesting that is a reasonable expectation. Surprising the market is never something the Fed strives to do, but it also has a tendency to stick to its plan, Jonny Matthews, founder of Super Macro, said during Tuesday’s panel.



“[Central bankers] have a strong commitment to their forward guidance,” Matthews said. “If they don’t follow through with it, it loses credibility.”&nbsp;



Rate cuts this year are bound to happen, Matthews added, although he says the odds the Fed “gets far in this cutting cycle” before the end of the year are slim.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Cryptos, stocks slide as markets brace for upcoming Fed decision

<div id="highlights-block_61410d5eb7dc3" class="highlights">
 <ul>
 <li>Regulation can bring clarity and security to the industry, especially for newcomers who have concerns </li>
 <li>Regulated financial institutions tend to consider regulatory concerns prior to product launch, which can slow the process but will exchange client trust</li>
 </ul>
 
</div>



Digital Asset Summit 2021, New York City — Banks and regulated financial institutions may be slower to bring products to market due to their regulatory requirements, but it helps to bolster client trust, Ziad Iskandar, senior lead, advanced solutions and digital assets unit at BNY Mellon, said during a panel at the <a href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" target="_blank" rel="noreferrer noopener">Digital Asset Summit</a> Tuesday. 



“Because we are regulated, that doesn’t always make life so easy, and it does influence product design,” said Iskandar. “We have continuous discussions about safety and soundness of what we are doing and if you are a client, those are questions you want answered.”&nbsp;



Taking a conservative regulatory approach may not be the fastest way to give clients exposure to cryptocurrencies, but it is never time wasted, Iskandar said.&nbsp;



In terms of bringing sound products to market, regulated institutions are more familiar with the process and framework, Ben Reynolds, chief strategy officer at Silvergate Bank, said during the panel. 



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="599" height="356" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/IMG_3415.jpeg" alt="DAS panel" class="wp-image-7905" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/IMG_3415.jpeg?w=599 599w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/IMG_3415.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/IMG_3415.jpeg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/IMG_3415.jpeg?w=439 439w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/IMG_3415.jpeg?w=368 368w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/IMG_3415.jpeg?w=80 80w" sizes="auto, (max-width: 599px) 100vw, 599px" /><figcaption>The Future of Financial Services and Digital Assets Panel at Digital Asset Summit 2021.</figcaption></figure></div>



“When you are a regulated institution, there is a clear path for launching products and defined standards that need to be met and maintained,” He said.



When it comes to new projects and protocols, these players often do not have the same considerations in mind. Project launch comes before regulatory considerations, Reynolds said.&nbsp;



The panelists agreed that <a href="https://cms.blockworks.co/gensler-investors-are-not-protected-when-it-comes-to-crypto/" target="_blank" rel="noreferrer noopener">regulatory</a> clarity in the space will help to advance the digital asset industry and give investors a greater sense of security. 



“There is money on the sidelines that’s waiting for the space to be more regulated,” said Reynolds. “​​As regulation comes in and as some of these questions start to get figured out, I think that more capital will come into the space, and a rising tide lifts all boats.”



Are you a UK or EU reader that can’t get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a> in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.

Digital Assets Summit