Ikigai Asset Management’s Chief Investment Officer highlights a key event necessary for a potential rally to occur cryptocurrencies trigger.
In an interview with the Bankless podcast, Ikigai co-founder Travis Kling says that alongside Federal Reserve policies threatening to push the economy into recession, the ongoing conflict between Russia and Ukraine must ultimately be resolved in order to improve the macroeconomic environment Image to improve stabilize.
“If you can get some kind of credible deal there, that arrangement of commodity prices will go down – they’re already way off the high – but commodity prices down, expectations down, inflation expectations down, stocks up, crypto up.”
Kling believes that the leading smart contract platform Ethereum (ETH) would benefit greatly if the geopolitical and financial situation improves.
“That would be the backdrop for crypto in general and ETH in particular to run tremendously hard when all these types of lines come up and you end up threading the needle there.
I’m not saying it’s definitely going to happen, but I think that’s the setup.”
The hedge fund manager comes up next Bitcoin (BTC) a and explains that the top crypto asset after market capitalization represents much more than just a hedge against short-term fluctuations in the consumer price index (CPI).
“You won’t find me anywhere publicly saying that bitcoin was like a CPI inflation hedge [or] a monetary inflation hedge.
It is a non-sovereign, fixed supply, global, immutable, decentralized digital store of value. I’ve rattled that off about 5,000 times at this point.
It is a hedge against irresponsibility by central banks and governments around the world.”
Kling concludes his analysis by comparing how Bitcoin responds to quantitative easing (QE) versus quantitative tightening (QT). In cases of QE, central banks keep interest rates low and increase the money supply, while interest rates rise and contracts deliver during the QT.
“[Bitcoin] loves QE and loathes QT. We are in a QT cycle right now but I am very confident that this is very temporary. The market is telling you that it is temporary and that the end is closer than the beginning.
This gets back to my point that I will move fastest from the bottom. I think it speaks volumes for Paul Tudor Jones’ nickname that bitcoin is the fastest horse.”
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Source: Crypto News Deutsch