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Fundstrat Co-Founder Tom Lee: Fed Rate Cuts Is a Blessing for Bitcoin

Co-founder of Fundstrat Global Advisors and longtime Bitcoin bull Tom Lee recently said that the interest rate cut by the Federal Reserve is a blessing for Bitcoin. He said that the rate cuts have a positive impact on Bitcoin’s prices.

Bitcoin is the ultimate hedge

During an interview with Fox Business Lee said,

“Bitcoin’s becoming increasingly a macro hedge for investors against things that could go wrong. Rate cuts are adding liquidity. Liquidity is pushing money into all these risk assets and also hedges, which is helping Bitcoin.”

Bitcoin started the year on a relatively dim note but moved up startlingly in the second quarter to 3x its price. That bullish movement was met with some corrections, and the coin dropped below $10,000 only to get back at the double-digit figure earlier today.

Fundstrat Co-Founder Tom Lee: Fed Rate Cuts Is a Blessing for Bitcoin

Lee, who had predicted that Bitcoin will cross $25,000 last year, is staying away from tall promises this time. He said that the coin’s all-time high was $20,000 and he sees it attaining that figure again this year. Given the fact that Bitcoin is refusing to cower under bear sentiments, there is ample reason to believe that the coin is in a strong position compared to 2018.

What about Powell’s concerns?

Fed Chairman, Jerome Powell, has previously spoken about his concerns about digital currencies. More specifically, he commented on Facebook’s Libra, a stablecoin backed by government securities. Speaking before the House Financial Services Committee recently, he said that Libra threatens privacy and financial stability. He also raised concerns about consumer protection and money laundering.

The chairwoman of the committee, Maxine Waters, also wrote a letter to Facebook about the potential disruptive potential of their currency. She noted that given the scale at which Libra will operate, it should be thoroughly investigated by the lawmakers before proceeding with development.

However, Lee doesn’t believe that Powell’s concerns about Libra necessarily apply to Bitcoin as well. He said that Libra and Bitcoin have completely different architecture. Lee said that some of Powell’s comments on Libra are “fair” but they “don’t actually apply to Bitcoin.”

Chamath Palihapitiya, the CEO of Social Capital, also believes in Bitcoin’s hedging abilities. Speaking to CNBC in early July, he said that Bitcoin is the “single best hedge” against the traditional financial infrastructure. The potential of Bitcoin as a true hedge will be tested in a tough geopolitical climate of today.

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      Sherlock Gomes loves to write and express his views on anything related to Crypto. He has been covering Crypto for more than two years now. He likes Bitcoin and Cardano. He also writes on Finance, Healthcare, and Technology among other stuff. He can be reached by e-mail on sherlockg@insidebitcoins.com