By Swann Collins, investor, writer and consultant in international affairs. Eurasia Business News, March 5, 2022
Bitcoin (BTC) gained 1.68% on March 5, reaching $ 39,360. A month ago, Bitcoin price reached $ 41,610, on February 5.
The famous cryptocurrency suffers from a lack of appetite from investors, who are worried as the US Federal Reserve announced that it will tighten monetary policy in 2022. That means less liquidity available on financial markets.
A month ago, Bitcoin price reached $ 41,610, on February 5.
Ethereum (ETH) rose by 2.83%, to $ 2,666. The second largest cryptocurrency benefits from the fact that it is the most used blockchain for the sale of NFT, these non-fungible tokens that are virtual certificates registered on a blockchain. NFT make it possible to identify a digital work, ensure its property rights and sell it on a marketplace, like a digital art-object. The NFT market is promising and already weights several billions dollars.
Solana (SOL) price gained 2.42%, reaching $89.67. One month ago, this cryptocurrency was worth $ 114.68.
Solana is considered an emerging competitor to Ethereum. Vitalik Buterin’s cryptocurrency is the leader among blockchains with smart contracts, but its network is often overloaded, which leads to increased fees for transfers. Solana offers faster and cheaper transactions.
Bitcoin has benefited at the end of 2020 and in 2021 from the flow of liquidity that watered the markets due to the very extensive monetary policy of the US Federal Reserve and of the European central bank. The prospect of a tapering by central bankers, to counter high inflation in the US (+7.5%), weighs on cryptocurrencies, as on the world stock markets.
XRP (XRP) gained 6.34% today, reaching $ 0.7507 while Avalanche (AVAX) is up 2.53%, hitting $ 77.18.
Read also : Why cryptocurrencies can help liberal democracies
On March 4, Anthony Scaramucci, the former White House communications director, was interviewed by investor platform Magnifi. According to the founder of SkyBridge Capital, investors should buy BTC, even if they have never worked with cryptocurrencies before.
In the future, according to Scaramucci, cold-blooded, waiting traders will benefit. He is confident that in a couple of years Bitcoin is guaranteed to reach $ 100,000. At the moment, the entrepreneur stores about $ 1 billion in bitcoins. Anthony Scaramucci added that he uses the services of financial companies Fidelity and NYDIG. When asked about regulation, the investor answered :
“I don’t think the U.S. wants to lose its leadership in financial services. If they decide to ban or over-regulate digital currencies, we will see capital flight and brain flight from the country.”
On 4 January 2021, Skybridge announced “the launch of the SkyBridge Bitcoin Fund LP, which provides mass-affluent investors with an institutional-grade vehicle to gain exposure to Bitcoin.”
Some investors also consider that a quality of bitcoin, its supply limited by the algorithm that regulates its issuance, makes it a safe haven against inflation, a kind of digital gold, which would therefore be less attractive if central banks tighten monetary policies. But we don’t think that quantitative easing will end soon in Europe and in the U.S., as the real estate bubble and the high state debts need extensive monetary policies to avoid bursting. Despite high inflation, central banks and governments can’t afford a reduction of liquidity in the markets. Therefore, the market of cryptocurrencies should soon come back to growth.
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