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Are Central Banks Running Out of Fire Power?

Email newsletter issued 4 Aug 2022 - Subscribe

Central banks continue to attempt to raise interest rates in order to combat inflation. On 27 July the FED raised rates by 0.75%, the second such increase in as many months. Today the Bank Of England raised their rates by 0.5%, the biggest rate rise in 27 years.

Despite this double whammy of bad news for risk assets such as crypto, we saw crypto markets gradually continue to rise over the period. Some are speculating that this is because the FED is already signalling that rate increases will be of limited duration. 

Whilst the rhetoric is around rates going up and up, the reality is that key central bank rates have been falling for 40 years as we can see below.

Even though central bank rates are increasing, they are not remotely close to the inflation rates we are now seeing. Inflation is currently 9.1% in the US, 8.9% in the Euro zone and 9.4% in the UK. That's if you believe the official figures, as many governments have adjusted their methodology for calculating inflation to make it appear lower. Shadow Stats put US inflation at over 12%, using the 1990 methodology. Some people think the true rate of inflation in the key global economies is closer to 20%.

Traditional economic wisdom would require interest rates to be raised above the level of inflation in order to get prices under control. We are not even remotely close to that level. Right now, the European Central Bank is fighting inflation of 8.9% with an interest rate of a whopping 0%.

40 years of economic insanity is starting to come to a head. The 2008 financial crisis was the first warning that the system was starting to creak. Since that date, governments and central banks have kicked the can down the road by maintaining rates at close to 0% and embarking on massive money printing programmes. The result is huge government debt piles, as well as massive corporate and personal debt.

Central banks can't raise rates by any significant amount as it causes the interest payments on government debt to increase exponentially. Rate rises also cause recessions. Even if you want to pretend there isn't a recession by changing the definition, these periods reduce economic activity and decrease tax receipts, placing the government under even more pressure.

Time after time, the central banks have threatened to keep raising rates before eventually backing off. In economic history, every time a government has faced a currency crisis and has had to choose between sound money or printing, they have always chosen to print.

So what does this all mean for crypto? Well, it looks like inflation is here to stay, and it also looks like the central banks are already hinting at running out of firepower. So it's possible that we'll see the banks easing rates later this year which will put some confidence back into risk assets such as crypto.

Meanwhile, the narrative around crypto as a hedge against inflation gets stronger. Crypto might be seen as risky, but keeping your wealth in fiat currencies and being guaranteed to lose 10 to 20% per year is also risky.

So here at DeFinda we are cautiously optimistic about the future for crypto prices.


BlockFi Rate Increases

Meanwhile, we are also starting to see signs of life in crypto yields. BlockFi has just increased its savings rates by 0.5% on large cap cryptos and by 2% on Uniswap.


We welcome any feedback, so please just email us at if you'd like to get in touch.

Matt & the DeFinda team


Best Instant Access Bitcoin Staking Yields

This week's best instant access Bitcoin staking yields. The table shows the maximum deposit that the rate is available for. Deposits above these levels will typically attract lower rates.
DeFi  198% APY Unlimited Go
DeFi   55% APY Unlimited Go
CeFi 33.1% APY Unlimited Go
DeFi 24.8% APY Unlimited Go
DeFi 21.9% APY Unlimited Go
DeFi 18.4% APY Unlimited Go
DeFi 16.5% APY Unlimited Go
DeFi 15.7% APY Unlimited Go
CeFi 12.2% APY Unlimited Go
DeFi 8.22% APY Unlimited Go
CeFi    6% APY Up To 0.1 BTC Go
CeFi  5.2% APY Unlimited Go
CeFi    4% APR Up To 0.1 BTC Go
CeFi    4% APY Up To 0.9227 BTC Go
DeFi 3.63% APY Unlimited Go
CeFi 3.27% APY Unlimited Go
CeFi    3% APR Up To 3.691 BTC Go
DeFi 2.74% APY Unlimited Go
CeFi  1.6% APR Up To 1.107 BTC Go
CeFi  1.5% APR Unlimited Go
CeFi  1.5% APY Up To 0.01 BTC Go
CeFi 1.42% APY Unlimited Go
DeFi 0.576% APY Unlimited Go
CeFi 0.25% APR Unlimited Go
DeFi 0.112% APY Unlimited Go
CeFi 0.024% APY Unlimited Go
CeFi 0.0144% APY Unlimited Go
CeFi 0.00147% APY Unlimited Go
CeFi     % APY Unlimited Go
View All Bitcoin Staking Yields

Highest Altcoin Yields

This week's highest yielding altcoins. These are highest yields we could find across all our listed crypto platforms.
1130% APY Go
741% APY Go
321% APY Go
218% APY Go
207% APY Go
196% APY Go
174% APY Go
166% APY Go
150% APY Go
131% APY Go
Note: Whilst some coins offer high yield it is important to consider the price trend of the coin and its fundamentals. Yield income could be offset by a drop in the value of the coin.
View All Coin Staking Yields

Cheapest Crypto Loan Rates

This week's cheapest loan rates from the thousands of crypto loan products that we track. Use our loan calculator to fully explore available loan, collateral, LTV and term options. We have included just one example loan from AAVE, but AAVE offers many other highly competitive loan rates.
LTV Collateral Accepted Rate
50% 0.00182% APY Go
20% 4.5% APR Go
35% 5.5% APR Go
50% 6.5% APR Go
70% 7.5% APR Go
50% 7.9% APR Go
50% 12% APR Go
25% 13.9% APR Go
30% 13.9% APR Go
33% 13.9% APR Go
View All Loans

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Biggest 7 Day Crypto Price Movements

The biggest price increases and decreases this week across the top 100 cryptos. Change in price over the last 7 days shown.
Gainers Losers
Conflux logo CFX 174.9% MAGIC logo MAGIC -31.9%
Mask Network logo MASK 113.6% Mina logo MINA -8.8%
Stacks logo STX 96.9% BitTorrent-New logo BTT -5.1%
ImmutableX logo IMX 82.5% Maker logo MKR -3.5%
SingularityNET logo AGIX 65.4% Terra Classic logo LUNC -1%
Fantom logo FTM 55.3% Cosmos logo ATOM -0.6%
Render Token logo RNDR 51.7%
The Graph logo GRT 46.5%
Optimism logo OP 45.3%
dYdX logo DYDX 44.6%

Biggest 7 Day Movements Against BTC

The biggest 7 day price increases and decreases of the top 100 altcoins against bitcoin. This shows whether an altcoin has done better or worse than bitcoin over the last 7 days.
Gainers Losers
CFX 102.6%
Bitcoin logo MASK 57.5%
Litecoin logo STX 44%
Namecoin logo IMX 34.8%
Terracoin logo AGIX 21.8%
Peercoin logo FTM 13.4%
Feathercoin logo RNDR 11.8% Feathercoin logo MKR -28.7%
Freicoin logo DYDX 8.9% Freicoin logo GUSD -26.3%
Ixcoin logo OP 7.3% Ixcoin logo USDT -26%
Digitalcoin logo GRT 7% Digitalcoin logo BUSD -25.6%
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