Coinbase CEO Brian Armstrong makes a bold prediction on Bitcoin and cryptocurrency.
In a series of tweets, Armstrong says he thinks the stock market rout and aggressive interest rate cuts could boost the crypto industry in 2020.
“A drop in the stock market and drops in interest rates could lead to growth in cryptography this year. Governments around the world are likely to seek to stimulate the economy in any way possible, including by using quantitative easing and increasing the money supply (impression of money).
On Tuesday, the Federal Reserve announced that it would cut interest rates by 50 basis points. The development failed to stop the bleeding as the Dow Jones Industrial Average and the S&P 500 fell nearly 3%.
Armstrong says China’s growing money supply could be the catalyst that drives crypto and Bitcoin.
“China has already done this, printing $ 173 billion. This can lead to a movement of funds towards cryptography, which are considered as a hedge against inflation…
This could be the year that the mindset of institutional investors begins to change, from crypto as a risk bet to crypto as a reserve currency. “
Armstrong’s feelings go against the prevailing wisdom of a number of industry leaders, including Galaxy Digital CEO Mike Novogratz, who recently stated that Bitcoin was not a cover against global economic turmoil.
An October research paper from major cryptocurrency reseller SFOX could support Armstrong’s theory. He found that Bitcoin could be seen as hedging in a number of countries grappling with crippling inflation.
“Although Bitcoin has key attributes that could make it useful as a hedge against macroeconomic factors in the future, it is important to keep in mind that there remains today a highly speculative asset class which is extremely volatile. Bitcoin can be used as a hedge against inflation in countries like Venezuela (which represents a unique case study) or against monetary policy, but we are still far from widespread adoption. “
Disclaimer: The opinions expressed in The Daily Hodl are not investment advice. Investors must exercise due diligence before investing in high risk Bitcoin, cryptocurrency or digital assets. Please note that your transfers and transactions are at your own risk and that any loss you may suffer is your responsibility. The Daily Hodl does not recommend the purchase or sale of cryptocurrencies or digital assets, and The Daily Hodl is not an investment adviser. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock / Tithi Luadthong