The co-founder of Fundstrat Global Advisors, Thomas Lee, considers that the recent rate cut by the U.S. Federal Reserve is good for Bitcoin (BTC), the most popular cryptocurrency in the market. In a recent interview with Fox Business on July 31, he commented that Bitcoin is becoming a macrohedge for investors.
Bitcoin Becomes A Hedge For Investors
The FED cut interest rates on Wednesday for the first time since the world crisis in 2008. Although the outlook for the U.S. economy remains favourable, the intention is to support the current growth experienced by the economy. This is what Jerome Powell, the chair of the FED said at a news conference.
Lee considers that Bitcoin is becoming increasingly popular as a hedge against fluctuations in the traditional financial market. He considered that the excess of liquidity is helping hedge and risk assets
On the matter, he commented:
“Bitcoin’s becoming increasingly a macrohedge for investors against things that could go wrong. Rate cuts are adding liquidity. Liquidity is pushing money into all these risk assets and also hedges, which is helping Bitcoin.”
Mr. Lee has also talked about bitcoin and how the digital currency could continue growing in the future. Although he said that they do not have a specific target, there is a possibility for Bitcoin to reach $20,000 this year as well.
Regarding the concerns about the Libra digital asset that many regulators have, Lee said that the virtual currency is different than Bitcoin which shows that this criticism cannot be applied to Bitcoin.
Anthony Pompliano, the co-founder of Morgan Creek Digital, is also worried about the effects that the stimulus policy taken by the European Central Bank (ECB) would have on the economy. Due to this reason, the Euro reached its lowest price against the US dollar in many years.
ROCKET FUEL: They’re going to cut rates and print money right as we march towards the Bitcoin halving.
Buckle up. This will be wild 🚀 pic.twitter.com/QotDXKTJRj
— Anthony Pompliano 🌪 (@APompliano) July 25, 2019
Central banks in the most important economies in the world are currently lowering rates that would allow the economy to keep growing in the future. This comes at a time in which global tensions are growing due to the U.S.-China trade war. In Europe, the Eurozone Manufacturing Purchasing Managers Index (PMI) reached a 79-month low of 46.6 in July. Moreover, inflation is also falling, which is making authorities worried.
At the time of writing this article, Bitcoin is being traded around $9,954 and it has a market capitalization of $177 billion, according to CoinMarketCap.
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