According to the CEO of Bitfury, Brian Brooks, traders don’t see bitcoin as a good inflation hedge in times of fiscal tightening. However, until recently experts in the crypto space believe that high inflation is good for the price of BTC. In an interview with CNBC August 29, Mr. Brooks also criticized the SEC’s questionable handling of the crypto industry.
Fed inflation tightening is hurting Bitcoin, CEO says Bitfury
US inflation is currently at 8.5%, down slightly from July’s 9.1%. Until recently, the prevailing opinion in space crypto was that a deflationary asset like Bitcoin would perform well in this inflationary environment.
In recent months, however, this theory has been tested and proven insufficient. Bitcoin price is now hovering around $20,000, down 60% from a year ago. According Brooksthe Fed’s aggressive response to strong inflationary pressures cooled the market.
“We’ve talked about the idea that bitcoin is an inflation hedge,” said Brooks at CNBC. “The longer the market expects tough policy from the Fed, the more people think the Fed is going to keep an aggressive stance, and that would tend to hurt bitcoin.”
Read more: Court rejects Central African Republic’s plan to offer citizenship in exchange for crypto native Sango Coin.
Since the beginning of the year, the Federal Reserve has adopted aggressive financial tightening. This by increasing borrowing costs through interest rates. The last increase of 0.75% took place in July. In total, rates have increased by 2.25% since the start of the year.
Another reason for Bitcoin’s underperformance could be due to the type of inflation the market is currently facing. According to Steve Lubka of Swan Bitcoin, BTC only performs in an inflationary environment caused by currency devaluation. Currently, much of the inflation is due to supply chain disruptions and commodity scarcity keys like wheat and oil.
The SEC’s approach to the industry crypto is bad for bitcoin
Otherwise, Brooks was particularly annoyed with the SEC’s approach to regulating the cryptosphere. This is an approach that is not very action-oriented and heavy on litigation. According to him, this has also hurt bitcoin and the market in general.
“The regulation does not mean that we continue people in court…HAS At some point, Congress and regulators need to take seriously the question of what the speed limit is on the crypto highway,” Mr. Brooks.
Read also: Mt Gox creditors refute rumors of dumping 140,000 bitcoins.
We would like to thank the writer of this article for this remarkable material
Bitfury CEO considers Fed inflation tightening and SEC crackdown bad for Bitcoin. – Latest News
Take a look at our social media profiles as well as other pages related to themhttps://metfabtech.com/related-pages/