Bitcoin is poised for a bullish streak after CPI data

Bitcoin is poised for a bullish streak after CPI data

Yahoo Finance Live’s Jared Blikre discusses how bitcoin is moving after the release of February CPI report data.

Video transcription

JARED BLIKRE: Crypto’s rally is back after February’s cooler-than-expected inflation report, where Bitcoin breached the $26,000 threshold amid concerns over the regulatory environment and risks in the banking system. The price action now suggests a bullish streak ahead.

Let me come to YFi Interactive. I don’t know how cool we can say this morning’s inflation report was, at least on the service side. But nevertheless, I’ve been saying for quite some time, several months now, that Bitcoin has been leading the risk markets on many of these reports, Julie, dealing with inflation, the big jobs report, Powell standing up. in front of people and opening their mouths, all of these things seem to hit Bitcoin disproportionately more. And now we have it against previous price resistance at the $25,000 level. I can go into a technical analysis here. But any comments on the big crypto rally?

JULIE HYMAN: Yes, two comments. We spoke to two guests today who mentioned crypto as an area that could still cause risk in the system, which I thought was quite interesting, unprompted. Not necessarily surprising that Bill Smead would say something like that, because he follows Buffett and Munger closely, and Munger has been very anti-crypto. We also heard Matt Miskin from John Hancock mention that, that would be an area to focus on. So price action aside, that’s something I think people need to keep in mind.

The other thing that I think is absolutely crazy is that people seem to be pouring into crypto over the last few days because they said, well, this was a failure of the banking system. DeFi and crypto are now — this solidifies our view that it’s the answer, which is just a little confusing to me, shall we say.

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JARED BLIKRE: If Gary Gensler has demonstrated anything, it’s that crypto is under the big thumb of US regulatory agencies, at least going forward. I think it will be heavy in that respect.

I will say this– in this part of the business cycle, where we see that the Federal Reserve has already gone a long way and now maybe just starting to hit the brakes, or at least lift its foot off the brakes here, at this point is when gold usually takes of. So we’ve seen gold futures rise over the last couple of days.

Here is a year-to-date chart. Let me just take a longer view. Here is a one-year chart. And you can see that this latest lift is only worth a few days, but is really happening with the same fervor that we saw interest rates move over the last day in reaction to what the Fed is doing. So if the Fed and the other federal governments here create moral hazard by guaranteeing all deposits and we see gold go up and Bitcoin is right there with it, maybe there are some parallels there.

But I would say that historically this is a time when gold starts to rise in the business cycle. People say why the gold was not collected last year. That’s because the Federal Reserve was far too hawkish. And historically, and we can see this panning out over several cycles in the past, that doesn’t happen.

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