Economist Alex Kruger says Federal Reserve Chairman Jerome Powell’s remarks at a November 30th Senate hearing were extremely pessimistic about Bitcoin.
Kruger said Powell’s comments that the Fed could accelerate the decline in bond purchases and that inflation is not “transitory” undermined the chances of Bitcoin reaching an all-time high (ATH) in December.
“Today Powell said the Fed will likely decide to accelerate the tapering (tightening) in December. Markets have reacted negatively and his comments on inflation are no longer temporary.
I don’t think today’s news is enough to change the risky investment trend. I think headwinds have increased and the likelihood of BTC trading new ATH in December has decreased (from ~ 2/3 to ~ 1/2).
The ratio of BTC to ATH implied by the options market is ~ 17% at the end of the year.
The economist says the entire crypto market could become bullish if buyers drive Bitcoin above $ 60,000.
That said, in a strict hedging market, if BTC manages to get back to 60,000, the entire market will explode, driven by spot (as opposed to leveraged) inflows.
Bitcoin is trading at $ 52,797 at the time of writing.
Source: TradingView
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