Crypto is now set for a massive Fed bomb that could destroy the prices of Bitcoin, Ethereum, BNB, XRP, Cardano, Dogecoin, Polygon and Solana
BitcoinBTC, ethereum and top ten cryptocurrencies including BNBBNB, XRPXRP, cardano, dogecoin, polygon and solana have surged into 2023 – with new hype emerging over a new “multi-billion dollar” opportunity.
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The price of bitcoin has shot up nearly 50% since the start of the year, boosting the price of ethereum and other major cryptocurrencies, as traders brace for an earthquake in China.
Now, as analysts pore over the latest economic data for signs of persistent inflation and a possible recession, influential investors have predicted that the US Federal Reserve may be about to spark another bitcoin and crypto bull run.
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“I’m super bullish [for bitcoin and crypto] … because I believe the answer to what the monetary and tax authorities will do in another unpleasant situation,” former BitMex CEO and veteran trader Arthur Hayes said during a YouTube interview. “They will hand out money to people and they will write it out.”
However, Hayes warned that the bitcoin price could fall back below $20,000 in the short term. “I think we’re in for a ‘correlation one’ moment,” Hayes said. “By that I mean everything goes down massively together, bitcoin included.”
The Fed’s ultra-loose monetary policy since the start of the Covid pandemic, which saw interest rates cut to effectively zero and trillions of dollars added to the Fed balance sheet helped propel the bitcoin price to a peak of nearly $70,000 per bitcoin in 2021.
As the Fed has raised interest rates in an effort to drive down inflation over the past 12 months, the price of bitcoin has collapsed below $16,000, wiping about $2 trillion from the combined bitcoin, ethereum and crypto markets.
This year, traders have become increasingly confident that the Fed has already won its war on inflation and will swing to a dovish stance if the economy slips into recession, sparking a price rally for bitcoin that has spread to ethereum and other major cryptocurrencies .
“The rally in prices around the world since October has been fueled by hopes that inflation will slow gently, interest rate hikes will stall and then become rate cuts, and as a result the global economy will suffer nothing worse than a soft landing, or even with start hovering again after avoiding an encounter with the ground altogether,” Russ Mould, director of investments at brokerage AJ Bell, said by email.
“However, investors are once again wondering whether such a golden trifecta is likely as economic data proves resilient, inflation (excluding energy) is a bit sticky and central bank policymakers continue to talk a tough game. The market’s current concern therefore appears to be being that good news for the economy is therefore bad news for asset prices, as it could force interest rates to go higher further than hoped, but the risk of recession remains one that cannot be dismissed lightly, either.”
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Earlier this month, Robert Kiyosaki, the author of the book Financial Advice, wrote: Rich Dad Poor Dad predicted a “giant crash” coming for financial markets, with a “depression possible” forcing the Fed to “print billions.”
Kiyosaki said this scenario could push the bitcoin price to an eye-popping $500,000 per bitcoin. “Why? Because faith in the US dollar, fake money, will be destroyed,” Kiyosaki posted to Twitter.
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