Bitcoin opened the 2022 by falling to its lowest level since early last month when it collapsed. This is due to interest rate pressure that came faster as the U.S. central bank’s Federal Reserve System (FED) started a strong early tightening.
As of 8 a.m. on the 6th in GMT+8, Bitcoin moved to the $43,444 level, 6% lower than 24 hours ago. It is the lowest since it fell to $42,296 at the moment of the weekend early last month.
The soaring inflation strongly hinted that the Fed will operate monetary policy more tightly, increasing the risk of reducing the liquidity of marginal assets.
According to the minutes of the Federal Open Market Committee (FOMC) of the Monetary Policy Decision Meeting released on the same day, members generally mentioned that it may be reasonable to raise the benchmark interest rate “sooner or faster pace.”
The Fed was hawkish (tight), said Stephen O’Elette, co-founder of the cryptocurrency platform FRNT Financial.
Cryptocurrency has been considered a means of avoiding inflation and storing value for quite a long time, but in a tightening atmosphere, cryptocurrency is treated conditionally as an absolutely dangerous asset.
Meanwhile Bloomberg reported on the 5th (local time), Goldman Sachs estimated that Bitcoin accounts for 20% of the value storage market consisting of Bitcoin and gold in 2022. Bitcoin’s market capitalization estimated by the company is $700 billion. Currently, the market capitalization of gold that can be invested is $2.6 trillion
Zach Pandl, head of Goldman Sachs’ Global Foreign Exchange, predicted in an investor memo the previous day that Bitcoin will take away gold’s share in the value storage market.
If Bitcoin’s share in the value storage means market rises to 50% over the next five years, it will rise 17% or 18% per year from the current price, fans said. “If that happens, Bitcoin will slightly exceed $100,000.”