Bitcoin

Will Interest Rate Hikes Throw Bitcoin Into a Bear Market? Coin Bureau Analyzes Potential Threat to Crypto Bull Run

The host of the favored crypto outlet Coin Bureau thinks the U.S. Federal Reserve’s plan to elevate rates of interest could have “profound implications” for the nation’s financial system and each asset class, together with crypto and Bitcoin (BTC).

Federal Reserve officers have just lately indicated they plan to cut back asset purchases and lift rates of interest subsequent yr in an effort to struggle inflation.

In a new video, pseudonymous dealer Guy tells his 1.8 million YouTube subscribers that BTC has behaved a lot extra like a “risk-on asset” up to now two years.

“In other words, portfolio managers and investors view it more as an asset class to generate strong returns and not one to act as a safe haven.”

The analyst additionally says there’s a “strong possibility” Bitcoin follows swimsuit if shares fall within the wake of the Fed elevating rates of interest.

“As we’ve seen over this yr, when there have been fears about potential tapering, the price of Bitcoin fell.

Hence if the Fed was to keep on with its plans to improve charges and rein in that financial stimulus, then Bitcoin is probably going to fall with all different dangerous belongings.”

Guy, nevertheless, nonetheless thinks Bitcoin is the most effective long-term inflation hedge, so long as traders are ready to take care of the violent price actions that may doubtless happen after the speed hikes.

“As we roll into the brand new yr with persistent and cussed inflation, traders are going to be searching for a lifeboat.

That’s why I believe that Bitcoin remains to be the most effective guess towards it.

If one can deal with the short-term volatility that’s doubtless to come from the speed hikes, it’s maybe the most effective guess to shield long-term buying energy.”

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Disclaimer: Opinions expressed at The Daily Hodl aren’t funding recommendation. Investors ought to do their due diligence earlier than making any high-risk investments in Bitcoin, cryptocurrency or digital belongings. Please be suggested that your transfers and trades are at your individual danger, and any loses it’s possible you’ll incur are your duty. The Daily Hodl doesn’t advocate the shopping for or promoting of any cryptocurrencies or digital belongings, neither is The Daily Hodl an funding advisor. Please be aware that The Daily Hodl participates in affiliate internet marketing.

Featured Image: Shutterstock/Sergey Nivens/kirill_makarov

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