Most experts are confident that the reappointment of Jerome Powell as chairman of the Fed will allow the bulls to maintain their previous strategy of investing in cryptocurrencies.
Mike Bailey, research director at FBB Capital Partners, believes that this decision will serve as a signal for traders who profit from the rally in the market to stick to the old investment strategy.
“For die-hard crypto bulls, Powell’s reappointment could provide some stability as these investors often see cryptocurrency as a defense against loose Fed policy.”
The head of the Cumberland Group, Chris Zuehlke, said Powell’s re-appointment would be a “positive thing” for the crypto industry. Fed Chairman Powell told the US Congress that, unlike China, the US does not plan to ban cryptocurrencies amid concerns over the policy of the Securities and Exchange Commission (SEC). This announcement has calmed down the cryptocurrency business a bit.
“Powell has taken the position that a stable financial market has the potential to use some additional regulation, which I think will be positive if your goal is long term.”
Suelke believes the Fed’s accommodative policy, which resulted in a 6.2% consumer price inflation last year, will continue, so investors who have used Bitcoin to hedge against inflation can continue to pursue this strategy. The CEO of the Cumberland Group noted that institutional investors continue to buy bitcoins even when there is a short-term profit taking. He added that in December, there may be market growth, not associated with the preservation of the Fed’s policy, but caused by the adoption of bitcoin in the world.
Jerome Powell has a balanced financial innovation policy. Unlike the Fed chairman, his deputy, Dr. Lael Brainard, supports the initiative to create the US government digital currency. Powell, on the one hand, supports cryptocurrencies, and on the other hand, he is accelerating the development of the digital dollar. Recall that at the beginning of the year, the division of the Federal Reserve in Boston and the Massachusetts Institute of Technology (MIT) announced the imminent completion of the development of a prototype of the state digital currency. In September, Jerome Powell called on Congressmen to join the project to create a digital currency of the Central Bank and develop an appropriate regulatory framework.
