Short-Term Bitcoin Traders Will Suffer From Fed’s Fight With Inflation, Says BitFury CEO ⋆ ZyCrypto

• BitFury’s CEO believes the Federal Reserve’s aggressive stance on inflation could hurt short-term Bitcoin traders.
• He explains that the Feds’ decisions play a role in the asset bordering on the $20K mark.
• The securities watchdog also came under fire for its botched attempts to regulate the cryptocurrency industry.

In an interview with CNBC, Bitfury CEO Brian Brooks revealed his thoughts on the current state of the markets, showing concern over the actions of short-term traders and the Securities and Exchange Commission (SEC).

As Bitcoin (BTC) continues to bob around $20,000, critics have poked holes in the claim that the asset is not a suitable hedge against inflation. The recent correlation between the digital currency and traditional markets has given credence to the claim.

However, Brooks jumped to the defense of BTC, saying that the reason for the apparent lack of faith in the asset lies in the aggressive stance of the Federal Reserve against inflation. The former acting controller of the currency noted that this attitude will “tend to harm Bitcoin.”

“The more the market expects tough policy from the Fed, the less Bitcoin is needed as an inflation hedge,” Brooks said.

Getting back to his point, Brooks added that it’s not about what inflation is, but what the market predicts inflation will be in the future. He adds that an aggressive stance by the Fed is “bad for people who are short-term traders who want to think of this as their hedge” because the expectation of inflation in the future is down.

The tango with inflation

According to the latest CPI report, US inflation reached a 40-year high of 8.5%. The figures have risen steadily since the start of the year, and the Fed has taken a cautious approach to the matter.

Last week, Jerome Powell, chairman of the Federal Reserve, revealed that the body would go to great lengths to fight inflation by raising interest rates. He added that the Fed would “vigorously attack inflation, assuring consumers that the negative macroeconomic conditions will be a thing of the past to the dismay of short-term BTC holders.

However, the International Monetary Fund (IMF) warns investors to bet on high prices for a couple of years.

SEC’s witch hunt

Brooks took a swipe at the Gary Gensler-led SEC over efforts to regulate the industry. Brooks noted that regulation differs from suing firms without specifying their conflicting laws.

The SEC waved the threat of litigation at Coinbase over a proposed lending product, ramped up its crypto watchdog unit and has been embroiled in a protracted legal battle with Ripple Labs over XRP tokens.

“Congress and the SEC need to get serious about telling people what the speed limit on the crypto highway is.”