Federal Reserve to Taper Money Printing That Fueled Bitcoin Bet

Federal Reserve to Taper Money Printing That Fueled Bitcoin Bet (by bit4you)

Price of the cryptocurrency under pressure

U.S. central bank interest rates are unchanged and close to 0%, but a growing number of analysts in traditional markets are saying that the Fed will likely need to raise rates to curb inflation in an environment in which U.S. consumer prices are actively moving higher. Accordingly, if the Fed follows its chosen course and adjusts rates based on inflation, bitcoin could become increasingly attractive as insurance against a falling dollar, putting the price of the cryptocurrency under pressure as a result.

Bitcoin often closely tied to U.S. stocks

Recently, more and more well-known investors, such as legendary hedge fund manager Paul Tudor Jones II and entrepreneurial businessman Peter Thiel, along with other crypto-traders, have been willing to believe that bitcoin is an effective mechanism for countering inflation. This is mainly due to the introduction of restrictions on issuing additional batches of bitcoin embedded in the software of the 12-year-old blockchain. JPMorgan analysts noted relatively recently that more and more investors are looking at cryptocurrency as a way to protect against inflation. However, bitcoin is also often closely tied to U.S. stocks, facing downward pressure when the Federal Reserve sharply tightens monetary policy, as higher borrowing costs often translate into higher financial costs for companies, potentially stalling quarterly earnings growth.

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BIT4YOU.io

BIT4YOU.io

bit4you is an european crypto exchange platform. We are facilitating the transition between crypto currencies and traditional currencies such as euro.