Whether or not bitcoin is a safe hedge against inflation is still to be determined, but it was certainly cause for celebration for some bitcoin traders after yesterday's Fed decisions. HeleneBraunn writes.
how strongly he feels about a quarter-percentage point increase, which gave traders plenty of time to price in a hike and weaken the effect of Wednesday’s decision on asset prices. Wall Street doesn’t like to be surprised, and the Fed doesn’t like to surprise Wall Street.
It’s not only traditional bankers who are carefully parsing the words out of Powell’s mouth; crypto traders are listening, too. Some crypto bros believe bitcoin to be a hedge against inflation because it can’t be manipulated by an FOMC-type body. But recent bitcoin movements don’t back this theory. The largest cryptocurrency by market cap is down nearly 30% over the last year, while inflation has been climbing to a four-decade high. Even Tesla CEO Elon MuskHe might be right. Traders want to store their money in a safe haven asset that shows high levels of stability. However, with bitcoin’s“Inflation still has less influence on bitcoin’s price than other speculative factors.
But the Fed’s decision certainly had an effect on bitcoin. The cryptocurrency briefly dipped to $39,513 after the decision but then quickly rebounded, climbing as high as $41,454 on Wednesday andMessari founder Ryan Selkis seemed very bullish after the Fed news,You can think what you want about the correlation between bitcoin and inflation. In the end, bitcoin is a lot of things to a lot of people, and that’s what makes it exciting to watch. Some people think of it as a technology.
This week, the cryptocurrency has moved enough to reinforce the idea that it could be a way to make money at a time when the state of traditional money makes you think twice about heating your living room.The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a
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