The chief investment officer of Ikigai Asset Management is highlighting a key event that could spark a cryptocurrency rally.
In an interview with the Bankless Podcast, Ikigai co-founder Travis Kling Say Aside from the Fed’s policy that could tip the economy into recession, what ultimately needs to be resolved is the ongoing conflict between Russia and Ukraine in order to stabilize the macroeconomic situation.
“If you can get some kind of credible treaty out there, commodity prices are down – they’ve come down a lot from their highs – but commodity prices are down, tightening expectations are down, inflation expectations are down, stocks are up, cryptocurrencies are up . “
Kling believes that if the geopolitical and financial situation improves, the leading smart contract platform Ethereum (ETH) will benefit to a large extent.
“This would be the backdrop for cryptocurrencies in general and ETH in particular if all these lines line up and you end up threading the needle there.
I’m not saying it’s definitely going to happen, but I think that’s the setup. “
The hedge fund manager next discussed Bitcoin (BTC), noting that the top crypto asset by market cap represents more than just a hedge against short-term fluctuations in the Consumer Price Index (CPI).
“You’ll never find me anywhere openly saying bitcoin is like a CPI inflation hedge [or] Currency inflation hedge.
It is a non-sovereign, hard-cap supply, global, immutable, decentralized digital store of value. At this point, I’ve chattered 5000 times.
This is an irresponsible hedge against global central banks and governments. “
Kling concludes his analysis by comparing Bitcoin’s response to quantitative easing (QE) versus quantitative tightening (QT). In the case of quantitative easing, the central bank keeps interest rates low and increases the money supply, while during quantitative easing, interest rates rise and the supply contracts.
“[Bitcoin] Love QE, hate QT. We’re in the QT cycle right now, but I’m pretty confident it’s only temporary. The market tells you it’s temporary and it’s closer to completion than it started.
This goes back to my point of moving the fastest from the bottom. I think it has something to do with Paul Tudor Jones’ nickname, Bitcoin is the fastest horse. “
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