By Billy Bambrough
The prices of Bitcoin and other cryptocurrencies have strengthened after the decision of the US Federal Reserve last week to tighten its monetary policy.
Immediately after the announcement, the price of Bitcoin jumped to $ 50,000, while Ethereum also jumped – exceeding $ 4,000 – after Jerome Powell announced that the Federal Reserve will reduce the monthly bond market by twice as much as it had he announced six weeks ago that he “sees” three interest rate hikes in 2022 in an effort to curb galloping inflation.
Against the backdrop of the Fed move, investor Rich Bernstein warned that Bitcoin and cryptocurrencies in general are the biggest financial bubble of all time, even though crypto investors “see” the prices of Bitcoin, Ethereum and others. digital currencies to continue the rally.
“Cryptocurrencies are the biggest financial bubble in history,” Bernstein, chief executive of asset management company Richard Bernstein Advisors, told CNBC. “A scary scene is taking shape.”
In particular, the price of the world’s most popular cryptocurrency has skyrocketed in recent years, with some smaller cryptocurrencies – such as Ethereum and its competitors – making even greater gains as traders and investors flock to the emerging digital currency market. Bitcoin has increased 600% in the last two years, while Ethereum has strengthened by about 2,500%, with the capitalization of the cryptocurrency market jumping from $ 200 billion – 24 months ago – to the historic high of 3 trillion. dollars in November.
Bernstein also warned of the “technology, innovation and inefficiency” stocks, which he called features, which he estimated could collapse, bringing back memories of the “dot.com bubble” that burst in the early 2000s.
“On one side of the seesaw sit bubble assets, as I call them: technology, innovation, and stock bubbles, along with cryptocurrencies,” Bernstein said. “On the other hand, all the other assets are sitting. With a horizon of 2022-2023, one would like to go and sit on the side that is ‘everything else'”.
Over the past 18 months, cryptocurrencies, money markets and assets have skyrocketed as central banks around the world poured liquid and cheap money into the market to prevent a financial catastrophe as a result of the pandemic and lockdowns imposed to curb its spread. -19. Some investors warn that as central banks tighten their unprecedented easing monetary policy, impressively high yields will plummet.
However, Bitcoin, Ethereum and other cryptocurrencies, as well as technology stocks, welcomed the Federal Reserve’s decision to take a more “aggressive” stance.
“While such monetary policy changes usually squeeze cryptocurrencies, as they are a class of risky assets that thrive in a low-interest environment, digital currencies have reacted positively to the Fed’s decisions, as developments seem to have already been priced and most clearly “The Federal Reserve was well received by investors,” wrote Marcus Sotiriou, a UK-based GlobalBlock analyst. He added that he expects Bitcoin markets to continue to be institutionalized, which he estimates will push the price of the world’s most popular cryptocurrency to new all-time highs in 2022.
Read also:
* The Bitcoin “bull” that was not intimidated by the “extinction” of $ 700 billion in the cryptocurrency market
* Bitcoin could pull Turkey out of the monetary crisis
* Cathie Wood: What stocks is she buying now and why it remains bullish on Bitcoin
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Source: Forbes
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