- BitFury CEO thinks the Federal Reserve’s aggressive stance on inflation could hurt Bitcoin traders in the short term.
- He explains that the decisions of the Feds play a role in the asset straddling the $20,000 mark.
- The securities watchdog has also come under fire for its botched attempts to regulate the cryptocurrency industry.
In an interview with CNBC, Bitfury CEO Brian Brooks laid bare the current state of the markets, expressing concern about the actions of short-term traders and the Securities and Exchange Commission (SEC).
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As Bitcoin (BTC) continues to hover around $20,000, critics have plow holes in the claim that the asset is not a proper inflation hedge. The recent correlation between digital currency and traditional markets has given credence to this claim.
However, Brooks came to the defense of BTC, saying that the reason for the apparent lack of confidence in the asset lies in the Federal Reserve’s aggressive stance against inflation. The former Acting Comptroller of the Currency noted that this posture “will tend to hurt Bitcoin.”
“The more the market expects a tight policy from the Fed, the less Bitcoin is needed as an inflation hedge,” said Brooks.
To drive home the point, Brooks added that it’s not about what inflation is, but about what the market predicts for inflation in the future. He adds that an aggressive stance by the Fed is “bad for short-term traders looking to consider this as their hedge” because the expectation of inflation in the future is falling.
The tango with inflation
According to the latest CPI report, US inflation hit a 40-year high of 8.5%. The numbers have been rising steadily since the start of the year, with the Fed taking a cautious approach to the issue.
Last week, Jerome Powell, chairman of the Federal Reserve, revealed that the body would do anything to fight inflation by raising interest rates. He added that the Fed would “boldly attack inflation, reassuring consumers that negative macroeconomic conditions will be a thing of the past, much to the dismay of short-term BTC holders.
However, the International Monetary Fund (IMF) is warning investors to prepare for high prices for a few years.
The SEC Witch Hunt
Brooks took swipes at the Gary Gensler-led SEC over attempts to regulate the industry. Brooks noted that regulation differs from lawsuits against companies without specifying their contrary laws.
The SEC waved the threat of litigation at Coinbase over a proposed loan product, increased its crypto watchdog unit, and got embroiled in a long-running legal battle with Ripple Labs over XRP tokens. .
“Congress and the SEC need to take seriously telling people what the speed limit is on the crypto highway.”
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Short-Term Bitcoin Traders Will Suffer From Fed’s Battle Against Inflation, Says BitFury CEO ⋆ ZyCrypto
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