By George Prior
The U.S. Federal Reserve’s failure on inflation will help drive the price of Bitcoin skywards, predicts the CEO of one of the world’s largest independent financial advisory, asset management and fintech organizations.
The assessment from deVere Group’s Nigel Green, a high-profile crypto advocate, comes as the U.S. consumer price index jumped 7% in 2021, the largest 12-month gain since June 1982. The widely followed inflation index increased 0.5% from November, exceeding forecasts.
He notes: “Last year, the Federal Reserve said that inflation in 2021 would be at 1.8%.
“However, U.S. prices soared last year by the highest level in nearly four decades, draining the purchasing power of American households.
“Inflation is everywhere, and it could be around for longer than anyone would like.
Free Reports:
Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
Sign Up for Our Stock Market Newsletter – Get updated on News, Charts & Rankings of Public Companies when you join our Stocks Newsletter
“So, why didn’t the Fed – the central bank of the world’s largest economy – not see what was coming?
“Could they seriously not see how supply chain bottlenecks and a shortage of qualified workers would drive up prices and erode people’s and firms’ spending power?”
He continues: “Surely, this must be the biggest miscalculation in the history of the U.S. central bank.
“It shows how the traditional fiat system, of which it is a key component as it is charged with maintaining price stability, is dangerously out of step with reality.
“I believe this will fuel the demand – and therefore the price of Bitcoin and other cryptocurrencies.”
Why is this so?
With Bitcoin’s fixed supply of 21 million, and institutional investors increasingly moving off the sidelines and into the crypto market, it’s going to continue to outpace gold as a safe haven for capital, says Nigel Green.
“Money flows to where it gets its best treatment, and with treasuries yielding negative in real terms, moving capital into the Fed is a clear liability for investors.
“In addition, in this current inflationary period, Bitcoin has outperformed gold which, until now, has always been almost universally hailed as the ultimate inflation hedge.”
Bitcoin is often referred to as ‘digital gold’ because like the precious metal it is a medium of exchange, a unit of account, non-sovereign, decentralized, scarce, and a store of value.
“Yet, the cryptocurrency, Bitcoin is superior to gold as a medium of exchange or form of payment,” says Nigel Green.
“Unlike gold, it is a fixed unit of account and easily divisible and transportable. Gold is not easily immediately divisible, and there are potential issues with purity and verification. Whereas Bitcoin is easily traced on blockchain technology and this is going to be a considerable advantage, especially in cross-border transactions.”
He concludes: “The Fed has lost control on prices and investors are looking for safe havens to protect their purchasing power.
“Bitcoin is primed to provide the inflation shield so many are now seeking, especially as our lives and the global economy is increasingly run on tech and digital solutions, and this megatrend is only set to become more dominant moving forward.”
About:
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.
- Today, investors’ focus is on the PCE Price Index inflation report Apr 26, 2024
- Gold price recovers amid uncertain US economic outlook Apr 26, 2024
- This “Bullish Buzz” Reaches Highest Level in 53 Years Apr 26, 2024
- FastSpring and EBANX Forge Partnership to Expand Pix Payments for Digital Products in Brazil Apr 25, 2024
- Target Thursdays: NAS100, Robusta Coffee, USDCHF Apr 25, 2024
- QCOM wants to create competition in the AI chip market. Hong Kong index hits five-month high Apr 25, 2024
- Japanese yen hits all-time low as BoJ meeting commences Apr 25, 2024
- TSLA shares rose on a weak report. Inflationary pressures are easing in Australia Apr 24, 2024
- USDJPY: On intervention watch Apr 24, 2024
- Euro gains against the dollar amid mixed economic signals Apr 24, 2024