“Inflation” is the word that everyone mentioned at the moment. So is “the best long-term investment’.
A recent study by Bank of America shows that in the last quarterly financial report of US businesses, the number of mentions of the decline in purchasing power has soared more than 3 times compared to the same period last year, the strongest since 2004. In other words, it seems that Wall Street is finally heeding the warning issued by longtime Bitcoin advocates.
There is growing concern that the Fed’s frenetic money printing program will cause prices to soar. The prices of all goods are also increasing rapidly. Companies will increase the price of their products to offset the costs, and the end bearer will be the consumer. The cost of living suddenly went up.
The real problem is what happens next. Although the Fed has signaled its willingness to let interest rates exceed 2%, inflation could strike very quickly. If inflation accelerates faster than wage growth, the Fed will be forced to tighten monetary policy sooner and faster. That leads to recession.
This unexpected scenario causes the market to worry. As Bank of America points out, reporting more inflation is an indicator of the economy’s decline (2 factors are up to 52% related).
Right now the Fed is not worried. After the meeting a few days ago, Fed still kept interest rates despite the assessment of the economy is heating up.
Everyone agrees inflation is a threat, but people disagree over what to do next. Longtime supporters of Bitcoin boast their currency as “digital gold”, a hedge against inflation as the best long-term investment. When the value of the dollar falls, Bitcoin becomes a haven.
However, major banks and many parties disagree with that. In another report released last month, Bank of America warned investors that Bitcoin “is not a hedge against inflation”. While offering Bitcoin-related products to its richest customers, Goldman Sachs warns against excessive energy consumption and increasing competition from other cryptocurrencies like Ether or even Dogecoin. will negatively affect the future of Bitcoin.
Nassim Nicholas Taleb, author of “Black Swans” recently told CNBC that Bitcoin is “an open Ponzi scam,” a gambling game. “There is no link between Bitcoin and inflation,” he asserted.
In the US, inflation has remained low since Bitcoin’s inception in 2009 and thus Bitcoin has not had a chance to prove its role as a hedge against inflation. However, that could change soon if inflation increases rapidly soon. Everyone will be able to see whether Bitcoin will stand or break down like it was more than a year ago.
Whatever the scenario, one thing is for certain: the time for Bitcoin to shine is near.
Bitcoin is facing a “make or break” moment to become a best long-term investment
These technical indicators suggest a breakout will not be easy to achieve, as Bitcoin took such a positive run last week.
According to a technical analysis by Bloomberg, Bitcoin is facing a “go-to-zero” moment after the recent sell-off. While the digital currency has rebounded above its 100-day average, it is still trading below its 50-day moving average. This movement often shows that Bitcoin is approaching the pivotal moment.
If Bitcoin fails to break out of the 50-day moving average (currently around $ 57,000), the coin could be in a period of volatility as the two lines depicting this trend are narrowing the gap. These technical indicators suggest a breakout will not be easy to achieve, as Bitcoin took such a positive run last week.
Movements of the world’s largest digital currency have been “more troubled” in recent days, after reaching a record high in mid-April of over $ 64,000. Since then, Bitcoin has recovered and received positive signals, including reiterating Tesla’s CFOs on the company’s commitment to the digital currency.
David Tawil, president of ProChain Capital, said: “The sharp decline is a downside point. In the end, however, I think the recovery and steady development are a good sign. The real potential of this digital currency, along with the ability to stabilize this asset class.”
Following the SEC’s announcement to delay its decision to allow a Bitcoin ETF to run, the world’s largest digital currency fell 1.4% yesterday. Currently, Bitcoin is trading at around $ 54,294.82.
Sam Stovall, a chief investment strategist at CFRA Research, said that if the stock market continues to climb, he predicts Bitcoin will continue that trend.
Despite the recent fluctuations, Bitcoin is still up 511% in the past year. According to Quant Insight, inflation and central bank policies are the biggest drivers for Bitcoin in the past 12 months. This research firm based in London specializes in learning about the relationship between assets and macro factors.
While there is controversy over whether Bitcoin has the potential to become an inflationary “barrier”, this argument is the main reason for the momentum that drives up the price momentum and many fans concur. this. Bitcoin’s fan group argues that the central bank’s massively printing money has made the coin an efficient store of assets. This is an explanation that has attracted attention in recent months, especially in the context that economists expect inflation to rise.
Chuck Cumello, chairman and CEO of Essex Financial Services, said: “It is clear that the driving factor behind Bitcoin’s excitement is the huge amount of money that has been and will be printed, along with the notion that we can’t have that much money in the system. “