The impact of interest rate increase on virtual currency

1.

If the US Federal Reserve decides the time of interest rate increase and implements the measures of interest rate increase, it will be a long-term good situation for the US dollar. Therefore, the price of the US dollar should rise, and other basket currencies will face downward pressure, including the RMB

the exchange rate of emerging markets may suffer a sharp drop, but the large price fluctuation will bring a lot of profit opportunities for investors who speculate in foreign exchange. Therefore, it is critical to pay attention to the policy changes of the Federal Reserve's interest rate increase

< H2 > extended information

as the Central Bank of the United States, the Federal Reserve obtains power from the United States Congress. It is regarded as an independent central bank, because its resolutions do not need to be approved by the president or any senior member of the legislature of the United States, it does not accept funding from the United States Congress, and its members' term of office also spans multiple presidential and congressional terms. Its financial independence is guaranteed by its huge profitability, mainly e to its ownership of government bonds

it returns billions of dollars to the government every year. Of course, the Federal Reserve is subject to the supervision of the US Congress, which regularly observes its activities and changes its functions through legislation. At the same time, the Fed must work within the overall framework of economic and financial policies established by the government

2. After attending the offline virtual currency investment seminar, many citizens bought unknown virtual currencies. At the beginning, it was said that the short-term income was dozens of times, but now it is down by more than 90%. The project operator denied any previous profit commitment, saying the loss was "normal". Many investors said they would call the police together

yesterday, a number of investors called the hotline to say that they hoped more people would know about this and prevent them from falling into a trap when investing< In April last year, Mr. Lin learned from his friend pan that the other party was running a virtual currency project called dascoin, and pan invited him to attend an investment lecture

Pan rents a store in Haitan villa in the urban area and often holds lectures on virtual currency investment“ I heard that once, he said that dascoin has a good prospect, and the income in a few months may be dozens of times. He also showed me the records of other people's investment on their mobile phones, many of which were bought for hundreds of thousands of yuan. " Mr. Lin said that he knew very little about virtual coins. He heard that someone had made money for "bitcoin". After listening to Pan's publicity, he decided to try it. "At that time, the price of a Darth coin was more than 1 yuan. I transferred it to Alipay for 7000 yuan and bought 5000."

"Pan said that the coins would not arrive until three months later. He also gave something similar to the U shield of online banking, saying that it was a" virtual currency wallet "and that he wanted to buy and sell virtual coins through that login account." Mr. Lin said that he had been waiting for more than half a year, but he didn't receive the virtual currency. "I'm sorry to urge him because I'm a friend. In March this year, I questioned a few words in the investment group, and he kicked me out of the group."< Mr. Zheng, who is engaged in hardware business, knows little about virtual currency. He met Mr. Pan under the introction of a friend and invested nearly 250000 yuan to buy dascoin four times“ Pan said that virtual currency should be minted in batches. Let me wait patiently. " Mr. Zheng said that the first class was more than a year. During this period, he saw the price of a dascoin drop from more than 1 yuan to 8 cents today

according to the query website provided by pan to Mr. Zheng, dascoin was issued in May last year. At the beginning of the issue, the highest price was 1.5439 yuan per coin. Since then, it has been on a downward trend

on June 27, pan informed Mr. Zheng that all the virtual coins had been cast and had been entered into his account“ The dascoin I bought for 250000 yuan is only 20000 yuan according to the latest price. " Mr. Lin asked why the losses were so serious“ Pan said that the market is not good, this is a normal market fluctuation. "

on July 1, Mr. Zheng found pan with his "virtual currency wallet" and asked the other party to show how to sell virtual currency on the spot. He said that Pan told him that the domestic trading volume of dascoin was small and it was difficult to sell it. "He said that it could be traded abroad, but I said that it could be sold. As a result, he said that it would be operated through the English interface, and he would not do it. Anyway, it means that I can't sell these coins."<

answering "I don't know" in the face of questions has also blacked the reporter

the investors calling the news hotline said that in a "dascoin" investment group, there are nearly 100 investors, most of them from Wenzhou. At present, a rights protection group composed of more than 10 of them has been established. According to the rough statistics of the members of the group, the amount of their investment alone exceeds one million yuan. At present, they have not obtained the income promised by the other party

"pan is just a leader. His family name is a woman surnamed Liao. We suspect that more investors are kept in the dark." Mr. Lin said that after the dascoin project, Liao also set up other similar virtual currency projects. He wanted to remind investors to be careful of falling into the trap

yesterday, the reporter contacted pan and Liao. In the face of the above investors' doubts, pan refused "I don't know!" Then hang up and pull the phone black reporter<

Liao denied that he had promised to get high returns by investing in dascoin. "Investment is inherently risky, and it's normal to go up and down."

according to instry insiders, the virtual currency instry is a mixture of good and bad, so we must do our homework before investing, and do not blindly follow the trend. When investing, it is best to buy mainstream currencies from well-known large platforms. This personage reminds, fictitious money market quotation fluctuation is huge, often rise abruptly drop, want to bear ability according to oneself risk investment

3. M / P = l (R, y)
m -- base money
P -- price level
R -- interest rate
y -- national output

in this equation, the left side is money supply, the right side is money demand
the increase of interest rate will only affect R and thus money demand, but the increase of interest rate will not directly affect money supply.

4. What this friend Weicheng Jun 680 said is not entirely correct. It is true that money is a commodity, and when the interest rate increases, it will rece the demand of some people, because not everyone can afford it. Therefore, some people will give up the loan from the bank because of the high interest rate. But it has not fully explained why interest rates have an impact on the value of the country's currency
first of all, we should correct a common misconception that the increase of money in circulation only comes from the issuance of money. In fact, if you deposit 1000 yuan in a bank and the bank lends it out, the currency in circulation has increased. If the lender deposits it in another bank and the bank lends it out, the currency in circulation has increased by 1000 yuan. This process is called the proct effect of money. Of course, it is impossible for a bank to lend out all the money deposited by its customers. Instead, it retains part of the money for withdrawal. Therefore, its size is determined by the bank's reserve ratio (that is, the proportion of retained funds in the total bank deposits)
then your question can be answered: if banks raise interest rates, the amount of money they lend out will be reced, so the amount of money in circulation will be reced. On the contrary, more loans will increase the amount of money in circulation, which will lead to inflation (called structural inflation, non vicious). Obviously, on the contrary, the decrease of currency in circulation will lead to currency appreciation
investors' throwing US dollars also leads to an increase in US dollars in circulation, and the price of US dollars may be lower than expected e to investors' psychological expectations
in fact, the problem is very simple. I recommend you to take a look at the macroeconomics of Gregory Mankiw, which is very clear. This book is very popular and can be easily understood by most people.

5.

Interest rate increase is directly proportional to RMB appreciation. The reasons for RMB appreciation are as follows:

interest rate increase is the behavior of the Central Bank of a country or region to increase the interest, which usually refers to the increase of deposit interest and loan interest, so that commercial banks and other financial institutions raise the borrowing cost of the central bank, and then force the market interest to increase, Make the RMB more valuable and then appreciate

extended data:

interest rate increase is not only an economic behavior, but also a proct of multiple political and social factors. Sometimes it is likely that it is not for economic purposes, but under pressure

for example, a country or a region will rece interest rates when its currency (or local currency) is constantly appreciating, so as to increase the money supply, which can achieve the purpose of restraining currency appreciation (there are many preconditions for this kind of behavior to succeed), but the country or region will face new pressure of price rise, We have to raise the interest rate to stabilize the price (if the interest rate rection currency increases, the price will rise further)

6. RMB, its foreign exchange transactions are regulated! Therefore, most of the hot money into China, is to in China's real estate and some commodities, to raise the inflation of these commodities, and the interest in the bank! On the 19th, the central bank raised interest rates mainly for real estate and commodities. And the hot money of buying RMB to maintain its value and collect interest will not be affected by this interest rate increase!! Therefore, the rise of US dollar and RMB is a short-term behavior!! As long as the United States will continue to ease its monetary policy, hot money will continue to enter China, and RMB will rise slightly against the US dollar, but the rise will not be big either!!! The shock of the international hot money on the 20th was e to the central bank's interest rate increase, and the hot money was worried that China's economy would slow down e to the interest rate increase! Therefore, people or funds who control hot money will re plan their hot money
raising interest rates will increase the expectation of RMB appreciation because the Federal Reserve starts the money printing machine, which makes the world full of a large number of US dollars. If there are more US dollars, it will be worthless. People with us dollars in hand will find a way to keep their US dollars value! The best way is to find the currency that is appreciating or has high interest rate, and exchange US dollars for these currencies! RMB interest rate increase gives these hot money a place to rest!!! So RMB interest rate increase will increase this part of the hot money to enter
it is not to stimulate the appreciation of RMB, nor to restrain it! This behavior of the government is more to consider the stable development of the national economy, rather than the ups and downs!!!

7. The impact of the central bank's interest rate increase on the monetary fund? The impact of the central bank's interest rate increase
as the monetary fund is a kind of fund that invests in short-term securities in the money market, it responds quickly to the central bank's monetary policy
the yield of the monetary fund will first fall (one week), then stabilize (one month), and then rise. The annualized yield will be 2.2-2.5%. You can buy it
raising interest rate is one of the macroeconomic control policies, which is bad for stock market and bond market. For long-term bonds, the impact is large, while for short-term bonds, the impact is small. Fund managers will adjust the ration of bonds held according to market and policy conditions to avoid some risks. The income of bond fund mainly comes from the interest of holding bond and the price difference of bond trading. Some bond funds (Harvest bonds, Wells Fargo Tianli, etc.) hold nearly 20% of the shares, which also benefit from the proceeds of stock trading. If the interest rate is no longer raised, the bonds will not be affected, and the bad effect of interest rate increase has been basically digested[ Analysts pointed out that China has entered the cycle of interest rate increase. With the rise of interest rate, money market funds are facing the risk of falling price of holding varieties and loss of customers. However, under the situation of interest rate increase, the increase of central bank note interest rate can improve the income of Monetary Fund. Under the situation of increased risk of stock market investment, if the monetary fund is properly allocated to maintain stable income, it can become a relatively safe variety.

8. Recing interest rate will rece the income of Monetary Fund, and increasing interest rate will increase the income of Monetary Fund

as the main investment direction of the monetary fund is short-term agreement deposits and short-term treasury bills. So this kind of asset is closely related to interest. For example, after the interest rate cut, the deposit interest rate of each term will also be reced, so the interest rate of the agreement deposit of the monetary fund investing in the bank will also be reced. On the contrary, if the benchmark interest rate rises, the interest rate of the agreement deposit of the Monetary Fund investing in the bank will also rise. Therefore, the impact of interest rate increase and interest rate cut on the income of monetary fund is obvious

from the actual situation, it is obvious that the return of the monetary fund is declining after several interest rate cuts in the last year. However, this decline is not reflected immediately after the interest rate cut. It will take a while to reflect it

note that this is different from long-term bonds in the general sense, because the ration of bonds invested by the monetary fund is too short, and they are all within one year. That's why there's such a pattern. If it is a long-term bond with a longer term, the rection of interest rate will make the bond price rise. Therefore, the monetary fund only reflects whether the short-term funds are tight or not.

9.

There is an inevitable connection between interest rate increase and currency appreciation

interest rate increase can stimulate the appreciation of domestic or local currency, and controlling interest rate increase can inhibit currency appreciation. For example, a country or a region may rece interest rates when its currency (or local currency) is constantly appreciating, so as to increase the money supply, which can achieve the purpose of restraining currency appreciation (there are many preconditions for this kind of behavior to succeed), but the country or region will face new upward pressure on prices, We have to raise the interest rate to stabilize the price (if the interest rate rection currency increases, the price will rise further)

extended data:

its working mechanism and principle

the function of interest increase is to increase the deposit interest and loan interest, so as to increase the borrowing cost of commercial banks and other financial institutions to the central bank, and then force the market interest to increase. The purpose of raising interest rate includes recing money supply, depressing consumption, depressing inflation, encouraging private deposits, slowing down or restraining market speculation and so on

interest rate increase can also be used as an indirect means to increase the value (exchange rate) of domestic or regional currencies against other currencies. On September 16, 1992, the Bank of England twice raised the interest rate of pound sterling in one day, trying to prevent George Soros, a financial tycoon, from attacking pound sterling, which is a typical example of interest rate increase in modern financial history

Generally speaking, the direct purpose of raising interest rate is to force commercial banks to borrow from the central bank at a higher cost, and then force the inter-bank interest rates (such as overnight interest rates and interbank interest rates) to increase, so as to increase the short-term financing cost of the whole financial market and curb malicious speculation

10. The relationship between interest rate and exchange rate is a long-term and complex issue, involving the development and evolution of monetary system. From the 200 year history of monetary development, the basic direction is the evolution from fixed exchange rate to floating exchange rate. Behind the evolution of exchange rate system is the evolution of global political and economic trends. The two world wars and the two instrial revolutions have changed the class composition of the major western countries, and the working class and the middle class have become important electoral forces. Therefore, the importance of controlling inflation and promoting employment is greatly increased; With the graal withdrawal of mercantilism from the historical stage, the importance of external equilibrium target has declined, and the monetary policy target of the central bank has been graally simplified, focusing on employment and inflation. According to the theory of Impossible Triangle, an open economy with free flow of capital can not have both independent monetary policy and fixed exchange rate system. In practice, after the failure of efforts to maintain a fixed exchange rate system, central banks graally hand over the exchange rate to the market, and independently use interest rate tools to regulate domestic employment, growth and inflation. The interest rate can be understood as the cost of borrowing funds, which is usually used as a price tool for the country to carry out macroeconomic regulation and monetary policy transmission. According to the national economic situation, the purpose of releasing or tightening liquidity to the market can be achieved by adjusting the interest rate
from the micro level, the profit and loss of holding a foreign exchange position include interest income and cost in addition to exchange rate changes. Therefore, when other factors remain unchanged, when a country's interest rate rises, the attractiveness of the currency will increase, and the probability of exchange rate appreciation will increase
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