The host of the popular crypto platform Coin Bureau, the US Federal Reserve’s plan to increase interest rates, the country’s economy, crypto and Bitcoin (BTC) He thinks it will have ‘profound implications’ for every asset class, including
Federal Reserve officials recently announced that they plan to reduce their asset purchases and increase interest rates next year to fight inflation.
The famous trader, known by the nickname Guy, said on YouTube that BTC has acted much more like a ‘risky asset’ over the past two years.
“In other words, portfolio managers and investors see it not as a safe haven, but as an asset class to generate strong returns.”
Do Interest Rate Increases Affect Bitcoin Price?
The analyst also says there is a “strong possibility” that Bitcoin will follow suit if stocks fall after the Fed raises interest rates.
“As we’ve seen this year, when there were fears of potential decline, the price of Bitcoin fell. So if the Fed continues its plans to raise rates and rein in this monetary stimulus, Bitcoin will likely go down along with all the other risky assets.”
But Guy thinks Bitcoin is the best long-term inflation hedge as long as investors are prepared to deal with the violent price movements that will come after rate hikes.
“We’re entering the new year with stubborn inflation, so investors will definitely be looking for a lifeboat. For this reason BTCI still think it is one of the best tools.
If the short-term volatility from interest rate hikes can be overcome, this is perhaps the best tool for maintaining long-term purchasing power.”
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.