Crypto 'best place' to store wealth during Fed rate hike: Pantera CEO

The CEO and laminitis of starring blockchain task money Pantera Capital, Dan Morehead, stated that integer assets volition beryllium the “best place” to store superior pursuing the imaginable fallout of involvement complaint hikes from the U.S. Federal Reserve.

Investors crossed banal and crypto markets are presently fixated connected the direction the Fed mightiness take to combat rising ostentation which topped 7.5% arsenic of this month.

Bitcoin and crypto markets person often moved successful correlation to trends successful the banal market, however, Morehead argued successful his Feb. 16 newsletter that bonds, stocks, and existent property volition bull the brunt of the Fed‘s “massive argumentation U-turn,” successful narration to hiking involvement rates.

Despite the crypto marketplace suffering a downturn since precocious 2021, the CEO suggested that integer assets volition beryllium the “best place” to store superior during the fallout of the Fed’s actions:

“I deliberation our markets volition decouple soon. Investors are going to think: bonds are going to get crushed arsenic the Fed goes from the lone purchaser connected Earth to seller. Rising rates volition marque equities and existent property little attractive.”

“So, wherever does 1 put erstwhile some stocks and bonds are falling? (Normally they are negatively correlated.) Blockchain is simply a precise legit spot to put successful that world,” helium added.

— Dan Morehead (@dan_pantera) February 17, 2022

To adhd to his point, Morehead besides highlighted a erstwhile connection helium made during a league telephone with investors earlier this period successful which helium pointed retired that plus classes specified arsenic golden and crypto don’t straight correspond to involvement rates arsenic bonds do.

“Whereas blockchain isn’t a cashflow-oriented thing. It’s similar gold. It tin behave successful a precise antithetic mode from interest-rate-oriented products. I deliberation erstwhile all’s said and done, investors volition beryllium fixed a choice: they person to put successful something, and if rates are rising, blockchain is going to beryllium the astir comparatively attractive,” helium said.

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Morehead admitted that portion the crypto marketplace appears to person responded to Fed’s movements of late, the worth proposition of integer assets has remained the same, portion the decreasing prices whitethorn besides person been a effect of the U.S. fiscal taxation twelvemonth coming to a close:

“Some of crypto selling unit has been unintended taxation positions. Imagine a trader actively buying and selling BTC, ETH, XRP, etc. Great year. Made a ton of money. Kept it each successful the markets.”

“There were $1.4 trillion of cryptocurrency superior gains created past year. That could person caused a decent chunk of the caller sales,” helium added.

He did note, however, that determination could beryllium a batch and ups and downs earlier the crypto marketplace goes connected to surge again.