Brian Brooks said he was optimistic about Bitcoin’s medium-term outlook. To support his point, the CEO of Bitfury cited the findings of a report recently released by Goldman Sachs.
Bitcoin gained 500% between November 2020 and March 2021. However, on January 10, 2022 at 9:45 a.m. EST, the No.1 cryptocurrency in the market fell to $ 39,692. “There are short-term events that are a bit negative for Bitcoin, but only short-term,” said Brian Brooks, CEO of Bitfury and former US controller of the currency, in an interview with CNBC.
In addition, Mr. Brooks clarified that “The Fed is introducing a moderate inflation strategy for 2022. Due to the potential of Bitcoin as an inflation hedge, there will be slightly negative effects on the price.” The American entrepreneur was referring to the minutes of the last Fed meeting, where it is evident that the bank is determined to remove the stimulus measures in order to combat rising prices.
Meanwhile, Bitbank’s Yuga Hasegawa believes the Fed’s revelations could push Bitcoin’s price down even more in the days to come. Note that the American central bank will publish a report this Wednesday, January 12, illustrating the increase in inflation during the COVID-19 pandemic due to the stimulus plans. This can cause the price of the asset to fall further.
Bitcoin took 20% of the gold market share in 2021
Brian Brooks said he was optimistic about Bitcoin’s medium-term outlook. To support his point, the CEO of Bitfury cited the findings of a report recently released by Goldman Sachs. According to this report, Bitcoin represents 20% of the global store of value market.
Thus, the report indicated that Bitcoin could reach $ 100,000 and have the same status as gold as a store of value. According to the same source, Bitcoin generated a 60% return in 2021. Crude oil came in second with 55%, followed by the S&P 500 which generated a 29% return. Separately, Galaxy Digital’s Mike Novogratz also commented on Brian Brooks’ predictions. Thus, he said: “I am not worried about the medium term, but we are going to have a lot of volatility in the coming weeks”.
Regarding the viability of his own business with the recent evolution of the price of Bitcoin, Mr Brooks pointed out: “The profitability of Bitcoin mining is only partially linked to the price of the asset. It’s more about the hash rate and who can grab the most market share ”. As a reminder, Bitfury has forged partnerships with several renewable energy suppliers. And according to Brooks, the company is even considering going public in the United States.
Finally, when asked about the link between the price of Bitcoin and ongoing projects in Web 3.0, Brooks replied: “There is Bitcoin, and then there is everything else”. According to him, most of the development work is done on Ethereum, Solana and Cardano.
What are the other reasons for the price drop?
According to Noelle Acheson of Genesis, a large sell-off in Bitcoin occurred due to stop-losses set at $ 40,000, and the asset found a support level at $ 40,000. In addition, CNBC asked John Wu of Ava Labs if institutional investing would continue in Bitcoin after this decline, to which he replied, “Smart money will go where the money is, that is. ie in the Web 3.0 ”.
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