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Bitcoin
Bitcoin

Bitfury CEO: Federal Reserve Fighting Inflation Is Bad For Bitcoin

Bitfury CEO Brian Brooks says that the Federal Reserve’s (Fed) war on inflation is suppressing the price of Bitcoin. According to the Bitfury boss, traders do not see BTC as a great hedge against inflation during times of extreme financial tightening.

FED
BTC

Fighting inflation

US inflation is now at 8.5%, a very slight drop from a 40-year high of 9.1% in July, but still well above the target rate of 2%. However, in recent months this theory has been put to the test and found to be incomplete. Bitcoin price today hovers around $20,000, down 60% from just a year ago. According to Brooks, the Fed’s aggressive response to high inflationary pressures cooled the market.

“We have talked about the idea that bitcoin is an inflation hedge,” Brooks told CNBC. “The more the market expects tough policy from the Fed, the more people think the Fed is going to keep an aggressive posture, and that would tend to harm Bitcoin.”

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Since the beginning of the year, the FED has pursued an aggressive policy of financial tightening by increasing the cost of borrowing through interest rates. At the beginning of 2022, interest rates were close to zero. Another reason for Bitcoin’s perceived underperformance could be due to the type of inflation the current market is facing.

According to Steven Lubka of Swan Bitcoin, BTC only performs well in inflationary environments caused by the devaluation of the currency, or in unusual terms – printing money.

Bitcoin

Be serious guys

While Brooks didn’t fully deliver on his promises about the Fed and economic policy, much of his anger seemed to have been reserved for the Securities and Exchange Commission (SEC). Brooks was particularly disturbed by the SEC’s approach to regulation in the cryptosphere, which was light on actionable guidance and heavy on litigation.

“Regulation does not mean suing people, and the approach the SEC has had for the last couple of years has been to not tell anybody what the rules are in advance but to sue people after they’ve launched a project, started a company, or listed a token, and then caused people to infer what the rules were later. That’s not a good thing, and so at some point congress and the regulators need to get serious about telling people, ‘what is the speed limit on the crypto highway?’” said Brooks.

In June, a savvy political operator Harris, who expressed her intention to work for a fairer crypto regulatory environment, said, “We must have transparency about what the rules of the road are.

About Hama Amefiz

Amefiz is a professional blockchain, cryptocurrency and tech journalist, regular contributor to newsbsc.com who is writing analysis about the latest developments in the cryptocurrency and blockchain space.

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