The founder of deVere Group predicts pending central bank interest rate announcements could cause a rise in the price of major cryptocurrencies this week. Nigel Green said the U.S. Federal Reserve, the Bank of England, the Central Bank of Norway, and the Reserve Bank of Australia, are all reviewing interest rate policy this week.
“Market watchers will be all eyes on central banks as they look for further hints on asset-buying tapering as global inflation ramps up,” Green said. “The Fed is expected to announce a taper, the Bank of England an interest rate rise, Norway likely to hint about its second-rate hike of the year, and the Reserve Bank of Australia could shift its guidance after last week letting its three-year bond yield surge through the targeted 0.1 per cent.”
Green said he believes there is a growing consensus tightening will come sooner than folks think. Such a climate will drive crypto prices up given many’s provable limited supply cap and resulting deflationary characteristics.
“The mounting concerns over inflation causing Bitcoin to appear more attractive as a hedge, also come at the time as inflows from institutional investors continue to increase – bringing with them capital and expertise – and as providers continue to meet ongoing demand with new Bitcoin-related investment products,” Green said. “In addition, the U.S. Federal Reserve saying it has no intention of banning cryptocurrencies is not going unnoticed by both retail and institutional investors.”
Green hedged his enthusiasm by noting the high probability other cryptos will see more regulatory oversight in the future. Bitcoin could be viewed in a different light partially on account of what he called its “gold-like status”.
Earlier this year Green predicted Bitcoin’s new highs. He added that if the current conditions persist another high could be reached before 2022.
“Crypto investors will be eyeing the central banks this week amid a flurry of interest rate reviews,” Green concluded. “Prices can be expected to be positively impacted as Bitcoin and others are increasingly regarded as a hedge against inflationary pressures.”