The CEO of Bitfury considers that the Fed’s fiscal tightening policy is affecting Bitcoin and the overall market. Although the US inflation is still above 8%, the price of BTC is around USD 20,000, 60% below its all-time high.
Bitfury CEO Brian Brooks recently said that the Federal Reserve’s (Fed) war on inflation affects the price of Bitcoin (BTC).
He considers that traders do not view BTC as a hedge against inflation during extreme fiscal tightening. He thinks that may lead long-term holders to expect the price to remain low in the short term.
Brooks told CNBC the Securities and Exchange Commission (SEC) should handle the crypto industry seriously and offer proper guidance rather than resorting to the courts.
The Fed Raises Interest Rates to Fight Inflation
The US inflation is at 8.5%, in contrast to July when it recorded its recent 40-year high of 9.1%. However, it is still well above the 2% target rate.
The overall crypto community has commented that deflationary assets like Bitcoin would do well in this high inflation environment.
However, that theory has recently undergone tests proving that it is deficient. The price of Bitcoin is around the USD 20,000 level, 60% below its all-time high.
Brooks believes the aggressive response of the Fed to high inflationary pressures has cooled the market. The executive said they had discussed the idea that Bitcoin is a hedge against inflation. He highlighted that a strict policy from the Fed would hurt the price of BTC.
Since early 2022, the Fed has followed an aggressive financial tightening policy, raising the cost of loans by 2.25% from nearly zero.
The US central bank raised interest rates by 0.25% in March, 0.50% in May, 0.75% in June, and 0.75% in July.
People also perceive that Bitcoin is underperforming due to the type of inflation the market faces.
Steven Lubka, the managing director of Swan Bitcoin, considers that BTC only works well in inflationary environments caused by currency devaluation or excessive money printing.
Brooks Adopts a Critical Stance against the SEC
Although Brooks was frank about the Fed and its economic policies, he focused most of his anger on the SEC. He was particularly upset about the regulatory approach from the latter agency to the crypto industry. Since it is light on actionable guidance and heavy on litigation, it has hurt Bitcoin and the overall market.
The CEO of Bitfury said that regulation does not mean suing people over new projects, firms, or tokens. Therefore, he commented the approach from the SEC over the past few years has consisted of not telling people the rules upfront.
Brooks seems to agree with the comments from Superintendent Adrienne Harris from the New York Department of Financial Services (DFS).
Harris has officially stated her intention to work toward a fairer crypto regulatory landscape. She said they should have transparency on the rules, moving away from regulation by application.
Meanwhile, Bitcoin is trading at around USD 20,424 and has accumulated a 2.9% gain over the last week. While its daily trading volume is above USD 28.18 billion, its market capitalization is about USD 390.84 billion, according to CoinGecko.
By Alexander Salazar
