Bitcoin, Ether Dip Despite China Rate Cut
  The latest moves in crypto markets, in context Edited by Omkar Godbole December 20, 2021 Sponsored by  Bitcoin (BTC) See the latest price here Ether (ETH) See the latest price here If you were forwarded this newsletter and would like to receive it, sign up here.
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Market Moves by Omkar Godbole Bitcoin and ether were again trading lower in Asian hours, continuing the year-long trend of losing ground mainly when America is asleep. The decline comes as traditional markets turn a blind eye to China's interest rate cut and remain risk-averse.  The trend continued on Monday despite the People's Bank of China (PBOC) taking steps to cushion the economy from the negative impact of property market woes and renewed coronavirus concerns.
The Chinese central bank announced a cut in its one-year loan prime rate, a de facto benchmark rate since 2019, from 3.85% to 3.8%, confirming the first reduction in nearly two years.
Interest rate cuts tend to inject liquidity into the economy. Thus, perceived inflation hedges like bitcoin, gold, and asset prices, in general, typically react positively to rate cuts. However, Asian equities traded lower alongside a 1.10% drop in the futures tied to the S&P 500. Oil prices slipped more than 3% and the anti-risk currencies like the Japanese yen are drawing safe-haven bids.
The market action suggests China's rate cut is perhaps too small compared to the impending tightening by the Fed and other central banks. Last week, the Fed signaled three rate hikes in 2022 and the Bank of England delivered a surprise interest rate hike. Read the full story here: Bitcoin, Ether Dip in 'Bearish Asia Session' as China Rate Cut Fails to Inspire Risk Buying
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