Bitcoin and cryptocurrency prices will “robustly rebound” after suddenly plummeting on Wednesday evening, after minutes from the U.S. Federal Reserve’s last meeting were published, according to the chief executive of a leading financial advisory and fintech.
The Bitcoin price shed $3,000 in just a few hours of trading, dropping from more than $47,000 to just under $44,000.
“The minutes from the Fed increased expectations that the central bank of the world’s largest economy will now move faster to raise interest rates to fight soaring inflation,” said long-time crypto advocate Nigel Green, CEO and founder of deVere Group.
“As a result, there’s been a knee-jerk sell-off on Wall Street and the crypto market as it is perceived by some traders that such a move puts at risk the liquidity that has benefitted many asset classes, including Bitcoin.”
Green added that, “we will see Bitcoin robustly rebound as the dust settles. This will then boost others in the crypto market.
“This is because Bitcoin and other digital currencies are widely regarded as a shield against inflation mainly due to its limited supply, which is not influenced by its price.
“In this latest inflationary period, Bitcoin has outperformed gold which, until now, has always been almost universally hailed as the ultimate inflation hedge.”
In this climate, said Green, and amid some peaks and troughs along the way, “as markets never move in a straight line”, we can expect to see the price of Bitcoin and other major cryptocurrencies “revert to an upward trajectory.”
Last month, after the world’s largest cryptocurrency came off its all-time high of nearly $70,000 in November, the deVere CEO said: “Like many serious crypto investors, I’m embracing this short-term volatility for longer-term gains.
“I’m using the lower prices of Bitcoin and other major cryptocurrencies to top-up my portfolio. Because like many major corporations, financial institutions, governments, prestigious universities, and household-name investing legends, I’m confident that digital currencies are the inevitable future of money.
“In our increasingly tech-driven, globalized world, it makes sense to hold digital, borderless, decentralised currencies. In addition, adoption and demand are increasing all the time, whilst at the same time, supply is decreasing.”
Of the latest Bitcoin price slump, Green concluded, “for people who are serious about building long-term wealth, this temporary volatility will be viewed as most other bouts of market turbulence: a buying opportunity.”