Consequently, billionaire investor Stanley Druckenmiller has suggested that if the masses lose trust in central banks due to tightening policies, cryptocurrencies might rally once again, he said during CNBC’s Delivering Alpha Investor Summit on September 28. Druckenmiller added that the current conditions make investing in assets like Bitcoin (BTC) challenging as the Federal Reserve faces the challenge of containing inflation and a possible recession. The inventor cited the recent decision by the Bank of England to pause its tightening policy to start purchasing government bonds. He noted that crypto might be the go-to asset if other banks follow suit.
Bitcoin’s inflationary status
Notably, Bitcoin has been touted as an inflationary hedge owing to its scarcity; however, the asset has failed to meet the standards, having corrected significantly since the start of the year. Furthermore, the crypto market continues to correlate with the stock market as investors look out for decoupling. During the session, Druckenmiller stated that the U.S. economy could potentially suffer from what he termed as a “hard landing” in the medium-term future while projecting a recession in 2023. Overall, the billionaire also projected that the current conditions might worsen especially for future generations.
Possible clash between crypto and central banks
Furthermore, Druckenmiller’s view on digital assets comes as different financial sector players point out a possible clash between cryptocurrencies and central banks. In particular, European Central Bank President Christine Lagarde warned that the growth of cryptocurrencies could hinder central banks’ role as an anchor for the economy. Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. Featured image via Rocky Xu YouTube
