Peter Thiel, the co-founder of PayPal, has said that the bitcoin price indicates a continuing economic crisis. Thiel said that the fact that bitcoin has reached a price of $60,000 is indicative of this catastrophe. Thiel attributes this mostly to the country’s astounding inflation rates in the aftermath of the outbreak.
The Fed was accused of creating money irresponsibly during this period without putting in place mechanisms to control the inflation is produced, which led investors to increasingly unorthodox investment alternatives to protect against this inflation.
This is consistent with the widespread attitude about financial markets. Goldman Sachs researchers also cited rising inflation as a factor in the rise of cryptocurrencies, estimating that the price of Ethereum will increase by another 80% if the inflation line continues on its present path.
Thiel spoke at the second National Conservatism Conference, where he highlighted his discontent with the Federal Reserve’s attitude to the country’s growing inflation. He said that the Federal Reserve is oblivious to the significance of the country’s inflation rates and has therefore taken no action to solve the problem.
The billionaire continued to attack the Fed’s activities, claiming it was in a condition of “epistemic closure.” A phrase used to describe narrow-mindedness. Thiel voiced great discontent with the Fed’s continued printing of dollars, a concern noted by many in the banking industry. Unscrupulous dollar creation will unintentionally increase inflation and harm the economy, but all warnings seem to have fallen on deaf ears.
Thiel said that rising inflation has contributed to bitcoin’s performance so far and might continue to do so. The billionaire, however, advised investors to proceed with care while investing in the product. “At $60,000 Bitcoin, I’m not convinced one should purchase enthusiastically,” Thiel stated. “However, what it is telling us is that we are in the midst of a crisis.”
Bitcoin vs. Economy
Recently, the status of the economy has been a source of anxiety in financial markets. COVID has wreaked havoc on economies worldwide, and the United States was not immune to the attack. Investors are concerned about the inflation rate. However, the leaders believe there is no need for panic at the moment.
At a news appearance in Ireland, US Treasury Secretary Janet Yellen reassured the population that there was nothing to fear. Citizens, on the other hand, are skeptical and have sought methods to hedge against inflation, which they anticipate will continue to grow.
This is where bitcoin comes into play. Bitcoin has regularly outperformed conventional financial markets in terms of annual returns, making it an appropriate inflation hedge. With annual returns of over 200 percent, investors in BTC may safely ignore the effect of inflation on their assets, which is now 5.4 percent for the last year.
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