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Arthur Hayes pointed to the weakening of the correlation of bitcoin with the Fed rate

Arthur Hayes, founder of the BitMEX exchange and CIO of Maelstrom declaredthat the correlation between the interest rate of the Federal Reserve System (Fed) and bitcoin is gradually weakening. This is reported CoinDesk.

Hayes believes that this relationship is gradually weakening:

“It’s different from what it was before. We see the standard scenario crumbling.”

Here we are talking about the fact that an increase in this indicator often entails a fall in the price of high-risk assets, including bitcoin. At the end of July, the Fed raised interest rates for the 11th time in a row. Despite this, bitcoin maintained its position with a slight downward correction.

Another example that Hayes cited was shares in component manufacturer Nvidia. Since the beginning of the year, this position has grown by more than 250%, according to NASDAQ.

A jump in the price of such assets could lead to an increase in taxes on capital gains and, as a result, revenues to the budget, Hayes said. However, raising the Fed’s interest rate reduces these fees.

“At the same time, this, combined with hostile austerity, is producing deficits, forcing the Treasury to issue more bonds. Interest payments stimulate spending and nominal GDP growth. This creates a paradox in which an increase in the interest rate produces economic growth,” the expert noted.

Regardless of the course of the Fed, the crypto asset industry is in a good position, says Hayes.

Source: Cryptocurrency

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