Bitcoin Might Beat Equities In 2022 As Fed Tightens Policy - Analysis.

Bitcoin Might Beat Equities In 2022 As Fed Tightens Policy - Analysis.

2022-01-07 | Daniel Smith

Bitcoin Might Beat Equities In 2022 As Fed Tightens Policy - Analysis.

As per Bloomberg commodity tactician Mike McGlone, the Federal Reserve's signaling for stricter monetary policy in 2022 may offer brief tailwinds for threat assets like stocks and cryptos, but there's a decent possibility that Bitcoin (BTC) will nevertheless succeed as investors recognize its significance as a digital reserve asset.

The Federal Reserve's proposal to increase interest charges in 2022 was touted as a potential "win-win situation for Bitcoin [against] the stock market" in the January issue of Bloomberg's Crypto Outlook. The grounds for this are that the S&P 500 Index is now the most overextended beyond its 60-month moving average in nearly two decades, and Bitcoin is gaining popularity as an inflation hedge.

Details from the Federal Reserve's December policy session were released on Wednesday, revealing that central bankers are prepared to rapidly reduce their intervention assistance sooner than originally anticipated. For the time being, the plan calls for three interest rate increases in 2022, along with a decrease in the Fed's balance sheet, which presently sits at about $8.3 trillion in Treasurys as well as mortgage-backed securities.

Despite reductions in stimulus are typically viewed as bad for riskier assets, which encompass stocks as well as cryptos, McGlone thinks Bitcoin is in a rare situation to succeed in this scenario.

The Bloomberg expert predicts the "lasting three" — Bitcoin (BTC), Ethereum (ETH), plus dollar-pegged stablecoins — to retain supremacy in the larger crypto space year-round.

According to information from CoinMarketCap as well as TradingView, the price of Bitcoin fell sharply on Wednesday after the publication of the Federal Open Market Committee meeting notes. The flagship crypto fell under $43,000 for the 1st time in September and is now fallen 8% in the last 24 hours.

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