If you ask popular economist Alex Krüger, bitcoin has already seen the bottom of the bear market and may be getting ready for a volatile upward price move. In a new livestream with podcaster Scott Melker, Krüger says he expects a bullish phase for bitcoin.
https://twitter.com/Cryptoverse_Eu/status/1630295444428300288
Tough period for equities
It is notable that he expects a bull market for bitcoin, while US equity markets could get tough, according to Krüger. He bases this on the fact that equities often suffer trade higher interest rates. “Interest rates are quite high right now. That is definitely a headwind. To me, that means […] equities have almost no upside potential,” Krüger said.
Bitcoin, according to Krüger, has idiosyncratic variables that mean it can move completely the other way compared to the rest of the market, both up and down. “I am currently betting on up,” Krüger said. Although he is long on bitcoin, he warns about inflation.
“I think the bottom has been reached and I am currently long, but I could be completely wrong. Things could go wrong and bitcoin could fall through the bottom. Inflation in particular could prove to be a problem, as some bears are calling at the moment,” said a clear Krüger.
Interest rate of 6.5 per cent
If inflation indeed remains as hot as it is now, Krüger said it is quite possible that the Federal Reserve could push interest rates up to 6.5 per cent. Should that happen, it would not be illogical for bitcoin to take another hit and possibly even record a new bottom.
On the other hand, it is hard to imagine that the economy can survive at 6.5 per cent interest rates. That could also push things into recession, forcing the Federal Reserve to cut interest rates again. In this regard, we are currently mostly in a period of intense uncertainty.
The Federal Reserve‘s next interest rate meeting is scheduled for 22 March. Right now, the expectation is that they will raise interest rates by 0.25 per cent then (73 per cent), but there is also a chance of a 0.50 per cent rate hike (27 per cent).
