Strike CEO Jack Mallers believes Bitcoin is ready to soar after the Fed’s US$300 billion injection to ease the banking crisis last week. Thus quoted by CryptoPotato.
According to Mallers, the US dollar is entering a new era of inflation due to the persistently high banking crisis, which will only benefit Bitcoin.
Talk with CNBCco-anchor Kelly Evans asked the CEO why people should expect Bitcoin to be moonshot after the banking crisis, which has historically been a period of deflation.
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He quotes former CTO of Coinbase Balaji Srinivasan, who predicted last week that the dollar would hyperinflate and send Bitcoin to US$1 million in the next 90 days.
Mallers’ argument is simple. Namely, Bitcoins are a fixed supply of money, while dollars are not.
This means Bitcoin will appreciate against the dollar as more dollars enter circulation.
“The only thing that’s clear to us, and clear to our customers, is you can’t store and store in dollars anymore,” Mallers said.
The Fed supported banks with $300 billion as part of its new Term Bank Funding Program last week, erasing half of the progress it has made in shrinking its balance sheets over the past year.
US Central Bank has been trying to quell persistently high inflation, which hit 9.1 percent in June, returning to its target rate of 2 percent.
Even though inflation remains hot at 6 percent, markets have shortened the timeframe for when they expect the Fed to start cutting interest rates from Q1 2024 to June 2023.
Mallers expect a normalized USD inflation rate of 5 percent to 10 percent henceforth, thanks to the US Federal Reserve.
“They have to stop these things with new money,” he continued, referring to the struggling banks after the Silicon Valley Bank (SVB) collapse.
“You’re looking at rare assets, risk assets actually being the big winners here,” said Mallers.
BitMEX co-founder Arthur Hayes published a blog post last Thursday offering a similar prediction, suggesting the Fed’s new program will usher in unlimited money printing.
Besides Hayes and Mallers, an analytics firm on-chain Glassnode has noted indicators on-chain The main thing is that Bitcoin has returned to market territory bullish beginning.
More than 122,000 new Bitcoin entities were created each day last week, an amount greater than 90 percent of the days in Bitcoin history.
Meanwhile, transactions reached a total of 309,500 per day – a sign that investor activity is increasing.
“Some long-term investors seem motivated to take advantage of this rally, signaling tremendous strength, and a reflection of confidence in the critical role Bitcoin plays in the future of the global financial system,” Glassnode added. [ab]