The Fed foresees more economic difficulties and bitcoin falls in price

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9 months ago

Federal Reserve Chairman Jerome Powell delivered a highly anticipated speech at the Fed's annual meeting in Kansas City on Friday, August 26, confirming that interest rates will continue to rise under the government's strategy. Built to reduce record inflation this year. The official also warned that credit restrictions and a slowdown in economic activity would have "painful" consequences for residents and businesses.

BTC price action has been trading sideways around $21,000 since Monday April 22, down 6% to $20,266 on Friday and $19,928.

Although the price of bitcoin has come out of a nine-month slump, the main argument of the cryptocurrency as a store of value or digital gold will no longer be valid.

According to Jeff Dorman, chief investment officer at Arca Asset Management, Bitcoin is in decline. "Bitcoin...has completely lost its narrative: It's not a hedge against inflation, it's not about decoration, and it's not about protection," the CEO said.

Coinbase CEO Brian Armstrong told CNBC that the crypto winter could last until next year and that the market recovery could take place within a year and a half.

The exchange has adjusted its growth plans and laid off 1,100 employees as crypto prices continue to fall, and says it will continue to tightly manage its spending levels. Coinbase reported a 64% drop in revenue in the second quarter and a loss of $1.1 billion in the same period.

Anthony Scaramucci, CEO of investment firm SkyBridge Capital, told CNBC that Bitcoin needs to be accepted and matured to be considered an effective hedge against inflation.

Commenting on bitcoin's plunge from $24,500 to $21,000 two weeks ago, the CEO said: "Bitcoin is not a mature asset to be considered a potential inflation hedge." Scaramucci estimates that there are currently around 3.1 billion bitcoin wallets which should hit 1 million, so this is effectively an inflation hedge.

A Forbes magazine study looked at daily bitcoin trading volume across 157 exchanges, which reached $128 billion on June 14. That number represents 51 percent of the $262 billion in transaction volume the exchange sent that day, according to the report's estimates. Forbes noted that the benchmark numbers could be useful for exchanges interested in recording the growing popularity.

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Avatar for Luis2020Diaz
9 months ago