The cryptocurrency price has finally recovered slightly after recording a decline in the first few days of 2022. In fact, last week saw the Bitcoin price drop to as low as $39,692. Thanks to the said recovery, some positive sentiment seems to seep in again.
While predicting long-term positivity in an interview with CNBC, Bitfury CEO and former Currency Control Brian Brooks noted that the short-term future could be “a bit negative” for Bitcoin. Bitcoin. This can happen due to the possibility that the Fed will soon remove its economic stimulus measures to combat price increases. This could undermine interest in Bitcoin as an inflation hedge.
He say,
“The Fed is rolling out some mild inflationary strategies for 2022. Given bitcoin’s potential as a hedge against inflation, there should be some modest negative impact on prices.”
If the Fed’s hawkish stance continues to strengthen in the form of rate hikes, many analysts believe that Bitcoin’s interest rates could fall further in the coming weeks. This could even be sped up by the Fed’s release of its expected inflation profile on Wednesday, which could lend more credence to its moves towards curbing inflation and stimulating growth. like.
However, Brooks continues to remain bullish in the medium term, especially now that Goldman Sachs has revealed Bitcoin’s upside potential as a store of value asset. A recent report by the bank notes that the leading digital asset now has a 20% share of the gold market. It also observed that it could soon become the equivalent of the precious metal once it hits the $100,000 price point, possibly in the next 5 years.
In fact, Bitcoin has gold beat, and notably all other assets in another year by delivering a 60% return in 2021, compared with 55% for crude oil and 29% for the S&P. Interestingly, gold has delivered an annualized return of 4% over the same period.
Pascal Gauthier, CEO of crypto wallet company Ledger believes that Bitcoin’s growth will also be supported by retail interest, which is said to be on the rise despite market volatility. He explained in a recent interview,
“The number of addresses with a minimum amount of BTC is actually growing relative to the number of whales. There is a profound retail trend everywhere in the world; they increasingly trust Bitcoin. It is the people who will push the price up.”
However, Brooks’ positive outlook for the cryptocurrency is not based solely on Bitcoin’s price action as he believes that the real growth drivers are web3 networks like “Ethereum, Solana and Cardano”. He say,
“Bitcoin has some really cool things happening on it but the web is really three things, that is happening in other places. We’re still new to web3, it’s a new concept, but development activity is very high. ”