Tom Lee, co-founder of Fundstrat Global Advisors, believes that the Fed's recent rate cut is a positive for Bitcoin (BTC).
On July 31, Lee spoke in an interview with Fox Commercial Channel about the positive impact of the Fed’s interest rate cut on bitcoin investment. He said:
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“Bitcoin is increasingly becoming a macro hedging tool for investors to guard against possible problems. Cutting interest rates has increased liquidity. Liquidity is driving capital into all of these risky and hedging assets, which helps Bitcoin.”
Lee made some more general comments on Bitcoin. Earlier today, Bitcoin broke through the $10,000 mark. In terms of price, Lee believes that by the end of this year, Bitcoin is likely to hit a record high. He says:
"We didn't set a target price for Bitcoin, but the previous high was $20,000. I think Bitcoin is likely to reach this high level this year."
Lee also made a brief comment on the concerns of Federal Reserve Chairman Jerome Powell about Facebook's Libra cryptocurrency. Powell said that at the recent hearing of the House Financial Services Committee, lawmakers "have serious concerns about Libra's privacy, money laundering, consumer protection and financial stability." Lee told Fox that he didn't think these concerns apply to Bitcoin:
"Libra's architecture is very different from Bitcoin, so I think some of his comments are fair to Libra, but in fact these comments don't apply to Bitcoin."
Bitcoin acts as a hedge investment
Similar to Tom Lee’s remark that Bitcoin is increasingly becoming a macro hedge investment, Chambath Palihapitiya, chief executive of venture capital firm Social Capital, recently even called Bitcoin The only best hedging tool for the traditional financial system. On July 9, Pali Hapitia said in an interview with CNBC Squawk Box:
“Bitcoin is the only best hedge against traditional financial infrastructure. Whether you support fiscal and monetary policy, it doesn't matter: Bitcoin is your insurance under the mattress.”
Just before the Fed cut interest rates, many people speculated that the Fed's monetary policy would have an impact on the cryptocurrency market. After the Fed announced its first interest rate cut in 10 years, Bitcoin broke through the $10,000 mark earlier today, innovating for several days. As of press time, Bitcoin has fallen back below $10,000 to report $9967.41.