Bitcoin has fared similarly to Gold in a recent price movement and has even beaten “safer” assets such as the NASDAQ.
After the Fed’s recent 0.75 percentage point interest rate rise, the NASDAQ and gold prices dropped. According to market statistics, the NASDAQ plummeted 4.97 percent and gold fell 0.68 percent in the previous forty-eight hours, as both reached their yearly lows.
During the same time, BTC increased by 0.55%. According to this, BTC is basically in the same position as stable assets like Gold and is even doing better than “safer” assets like NASDAQ.
The Fed has chosen a Hawkish stance so far, battling inflation vigorously and seeking to return it to 2%. Fed Chairman Jay Powell said that there is still a considerable distance to go in the fight against inflation. He said:
“Since our last meeting, new data shows that the eventual level of interest rates will be higher than anticipated.”
He said that it is too early to talk about stopping price increases. Consequently, it is unlikely that the Fed would refrain from increasing interest rates so long as inflation remains.
Bitcoin continues to operate as intended despite global inflation’s unsettling effect on markets. Demand for the world’s most valuable cryptocurrency should climb if present trends continue. Moreover, given the restricted rise in supply, this price increase should exceed inflation.
Michael Saylor, Executive Chairman of MicroStrategy, validated this claim with evidence. Saylor said on MicroStrategy’s third-quarter results call that Bitcoin is winning and that his company has profited from it.
Saylor explained how BTC has increased by 72% from August 2020, whilst the NASDAQ increased by just 15% and Gold declined by 19%. This contribution illustrates BTC’s tremendous growth throughout the years, despite its recent decline owing to the ongoing bear market.
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