Mohamed A. El-Erian believes that hedge assets, including crypto, will rise in price if the Fed decides to increase inflation target to 3%
During his appearance on today’s CNBC Squawk Box, economist and businessman, economic adviser at Allianz, Mohamed A. El-Erian, cited one reason why the price of crypto is likely to increase from its current levels.
If Fed changes its inflation target
The economist believes that the Fed may be pushed to change the inflation target from 2-3% since they are likely to realize that to achieve the initially announced target of 2% is impossible and failing to so would undermine their credibility.
In this case, El-Erian thinks the crypto and gold will go higher. When they discuss crypto on CNBC, they mostly talk about Bitcoin and less often about Ethereum. And since financial institutions believe that BTC is a hedge against inflation, in this case the discussion was probably about Bitcoin.
The author of the bestselling book on financial literacy, “Rich Dad, Poor Dad” Robert Kiyosaki, who has been a long term investor in real estate and recently turned to Bitcoin, silver and gold, also tweeted earlier today that Bitcoin, along with XAU and XAG, are good buys now due to the current economic situation.
He believes that bonds are the riskiest investment today.
Bitcoin followed stocks down the hill: Peter Schiff
Long-term Bitcoin critic and chairman on SchiffGold, Peter Schiff, has taken to Twitter to take a jab at Bitcoin as the price fell below $39,000 earlier today. That was an 80-day low for BTC.
He tweeted that BTC held above this level throughout the weekend; however, when stocks and gold trading resumed on Monday, Bitcoin fell to a low of $38,500, after tech stocks.
Gold at the moment is trading at $1,990, rising by $15. Schiff added that by falling down, Bitcoin has “maintained its inverse correlation with gold.”
The price of Bitcoin dipped below $39,000, following the market selloff. Selling pressure on the major crypto has intensified as the Fed has tightened policy in order to manage inflation.
As it happened, liquidations across exchanges reached a whopping $200 million. Ninety-five percent of those were longs.
To date, the price of Bitcoin has shown a recovery to $39,371 on the Bitstamp exchange.
