Cryptocurrency prices have finally recovered slightly after noting a dip in the early days of 2022. In fact, last week the price of Bitcoin fell to $39,692. Thanks to said recovery, some of the positive sentiment seems to be seeping in again.
While predicting long-term positivity in a interview With CNBC, Bitfury CEO and former Acting Comptroller of the Currency Brian Brooks noted that the short-term future could be “a bit negative” for Bitcoin. This may be due to the possibility of the fed will soon remove stimulus measures from the economy to combat rising prices. This could diminish interest in bitcoin as an inflation hedge.
“The Fed is introducing a moderate inflation strategy for 2022. Due to bitcoin’s potential as an inflation hedge, there will be mildly negative price effects.”
If the Fed warmongering position continues to escalate in the form of interest rate hikes, many analysts believe Bitcoin rates could drop further in the coming weeks. It could even be accelerated by forecasts Release inflation records by the Fed on Wednesday, which could further lend credence to its inflation-fighting and stimulus measures.
However, Brooks continues to remain optimistic over the medium term, especially now that Goldman Sachs has revealed Bitcoin’s growing potential as a store of value assets. A recent report from the bank noted that the leading digital asset has now gobbled up 20% of gold’s market share. He also observed that it could soon become the equivalent of the precious metal once it reaches a price of $100,000, which could be within the next five years.
Bitcoin has, in effect, beaten gold, and including all other assets for another year by offering returns of 60% in 2021, compared to Crude Oil’s 55% and S&P’s 29%. Interestingly, gold provided an annual return of 4% over the same period.
Pascal Gauthier, CEO of crypto wallet company Ledger, believes that Bitcoin’s growth will also be supported by retailer interest, which has reportedly increased despite market volatility. He explained in a recent interview,
“The number of addresses with the minimum number of BTC is actually increasing compared to the number of whales. There is a deep retail trend all over the world; they trust bitcoin more and more. These are the people who will drive up the prices.
Nonetheless, Brooks’ positive outlook for cryptocurrencies isn’t just based on Bitcoin’s price action as he believes the real engines of growth are Web3 networks such as “Ethereum, Solana, and Cardano.” He said,
“Bitcoin has some really cool stuff happening on it, but the real Web 3 stuff is happening elsewhere. We’re still new to web3, it’s a new concept, yet the development activity is extremely high.