US Fed will kill bitcoin eventually, investor warns
Bitcoin will not be part of US monetary policy, so the Federal Reserve will crack down on it, portfolio manager Steve Chiavarone warns. However, the blockchain technology behind cryptocurrencies will remain.
“The currency itself isn’t a great medium of exchange, it’s not a great store of value. It has a fixed amount so the Fed would have to kill it at some point because they wouldn’t be able to engage in monetary policy,” Chiavarone said in an interview with CNBC. “But blockchain behind it, we think is more real than people are giving it credit."
Banks have admitted that blockchain can improve the efficiency of clearing and settlement, make cross-border payments faster and cheaper, significantly cut red tape and modernize customer identification systems.
According to Chiavarone, the cryptocurrency market is dominated by greed, and it is the first sign of greed since the economic crisis of 2008, dubbed the ‘Great Recession.’
“Investors wanted to be on the roller coaster in the ‘90s. They wanted high returns. They didn’t mind volatility,” Chiavarone said.
“The Great Recession put the fear in a lot of folks and they wanted to go on the merry-go-round. Folks really want to get on that risk trade.”
Bitcoin could follow the fate of Pets.com – one of the biggest dotcoms to crash when the tech bubble burst in early 2000s, Chiavarone said.
The cryptocurrency market was growing on Wednesday, with bitcoin trading above $11,000. All digital currencies from Coinmarketcap’s top 20, and 87 out of the top 100, were gaining after two days of losses.
Bitcoin and other cryptocurrencies have fallen as much as 50 percent this year, as investors were scared off by news of crackdowns in China and South Korea. Some analysts say investors just wanted to cash in after prices soared due to the mainstream success of cryptocurrencies.
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