Will rate hikes plunge Bitcoin into a bear market? Coin Bureau analyzes potential threat to Crypto Bull Run
The host of popular crypto outlet Coin Bureau believes the US Federal Reserve’s plan to raise interest rates will “have a profound impact” on the country’s economy and every asset class, including crypto and Bitcoin (BTC).
Federal Reserve officials recently announced plans to cut asset purchases and raise interest rates over the next year to keep the inflation to fight.
In a new video, the pseudonymous trader Guy tells his 1.8 million YouTube subscribers that BTC has behaved much more like a “risk-on-asset” in the past two years.
“In other words, portfolio managers and investors see it as an asset class to generate strong returns rather than a safe haven.”
The analyst also says that there is a “strong possibility” that Bitcoin will follow suit if stocks fall on the Fed’s rate hike.
“As we saw earlier this year, the price of Bitcoin fell amid concerns about a possible reduction.
If the Fed continues its plans to hike rates and curb these monetary stimulus, Bitcoin is likely to fall with all other risky assets. “
However, Guy still believes that Bitcoin is the best long-term inflation hedge as long as investors are willing to deal with the sharp price movements that are likely to occur after the rate hikes.
“As we roll into the new year with sustained and stubborn inflation, investors will be looking for a lifeboat.
So I think Bitcoin is still the best choice against it.
If you can handle the short term volatility that is likely to stem from the rate hikes, this may be your best bet to protect purchasing power over the long term. “
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Source: Crypto News Deutsch