- Federal Reserve of the United States said that in the coming months they will deliver a strong framework on low rates as it briefs the major issue of inflation.
- Fed’s policies on inflation to some extent influence the price of Bitcoin. In such situations, investors have considered Bitcoin as an effective hedge.
The Federal Reserve of the United States said that in the coming months they will deliver a strong framework on low rates as it briefs the major issue of inflation. The Fed officials stated that the central bank would allow a drift of 2% inflation at most. It has been anticipated that the Fed would adopt more adjustable measures than it did during the Great Recession. Fed’s decision comes at a time when the country’s economy is crippled by the Coronavirus pandemic. Furthermore, the Fed assured that it would also look up to the matter of unemployment in the US which has been undressed to the pandemic.
Bitcoin as an Effective Hedge
However, the Fed’s policies on inflation to some extent influence the price of Bitcoin. In such situations, investors have considered Bitcoin as an effective hedge. A hedge is a protective asset that investors use to protect their finances in adverse market situations. A few days ago, a report by the cryptocurrency analyst agency Messari said that more and more investors are looking upon digital gold as an inflation hedge as the US government initiates unprecedented money printing. Bitcoin’s price has already been up by approximately 56% compared to silver’s and gold’s whose prices have risen by 36% and 30% respectively this year.
Crypto Agency States BTC Is Not Far Away From The $50000 Mark
Clearly, BTC proves why it is a supreme hedge investment. The cryptocurrency is currently trading at $11,608.05 some $400 short of going above the $12000 resistance. Messari further wrote that it won’t require much of the institutional investments to drive BTC to its previous $50000 high. The chief investment officer of the crypto company Arca said that as the value of gold, silver, and other equity bonds continue to rise and the dollar depreciates, the master of cryptocurrencies will be back in the spotlight yet again, but this time for a longer time.
BTC Will Emerge as the Winner Says Pompliano
Morgan Creek Digital’s CEO, Anthony Pompliano that the Federal Reserve’s inflation measure may end in a bad way which may incentivize the adoption of cryptocurrency. He advised the investors that they should immediately stop hoarding cash as Fed’s inflation efforts directly affect the US Dollar. He further anticipated that Gold, Silver, Real Estate bonds and Bitcoin are going to rise much much higher than they already are. He particularly pointed out that BTC will be the winner in this run owing to its high volatility.