Fed money printer goes into reverse: What does it mean for crypto?
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What will happen to the crypto markets when quantitative tightening takes full effect and the Federal Reserve shelves the money printer?
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The United States Federal Reserve is starting the process of paring back its $9 trillion balance sheet that ballooned in recent years in a move called quantitative tightening (QT).
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Analysts from a crypto exchange and financial investment firm have conflicting opinions about whether QT, starting on Wednesday, will put an end to a decade of unprecedented growth across crypto markets.
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Laypeople can consider QT the opposite of quantitative easing (QE), or money printing, which the Fed has been engaged in since the start of the COVID-19 pandemic in 2020. Under QE conditions, more money is created and distributed while the Fed adds bonds and other treasury instruments to its balance sheet.
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The Fed plans on shrinking its balance sheet by $47.5 billion per month for the next three months. In September of this year, it plans on a $95 billion reduction. It aims to see its balance sheet reduced by $7.6 trillion by the end of 2023.
Let’s imagine that you are the founder of a company that has successfully raised an angel or institutional round and are currently in a situation where you have 12 months or less of runway.
The hardest part of dealing with a low runway situation is managing your own psychology. You have to simultaneously manage your own anxiety to not be overly negative about your prospects, but also not be irrationally positive. It’s a delicate balance.
The first step is to understand exactly how much cash and runway you have.
If you are Default Dead then it is your responsibility as a founder to immediately take actions to become Default Alive. The mechanisms by which you can move from Default Dead to Default Alive are straightforward: Either you need to grow revenue more quickly, cut costs, or both.
Now, decentralization is emerging across biotech in various ways: Startups are launching outside the major hubs, sharing lab space, hiring across borders, and collaborating on research projects.
We’re even seeing new types of organizations beyond traditional companies, such as decentralized autonomous organizations (DAOs), enter the drug-development game — with funding to boot.
Decentralized models are still experimental. But they lower the barrier to entry for smaller companies and harness the talents of a more diverse pool of scientists, potentially hastening the development of new drugs and, hopefully, effective cures.
