While the Federal Reserve is expected to raise interest rates five to seven times this year, higher interest rates won’t crash the gold and crypto markets, said Frank Holmes, Chairman of HIVE Blockchain Technologies, because real interest rates are not positive.
Frank Holmes: There will be a rapid economic slowdown
Frank Holmes discussed the impact of rising interest rates on Bitcoin and gold prices at the Bitcoin 2022 Conference in Miami. Rising interest rates are now a very sensitive issue, says the expert, who said the Fed should be very careful when slowing down the economy in an election year and President Biden losing control of Congress. Frank Holmes says:
The only way the Fed could do this was if it had really positive interest rates. Otherwise it would be a crisis for the overall economy. The 10- and 2-year bonds are now reversed. Stress is starting to show itself in the system. But I think when it hits, there will be a rapid economic slowdown.
As we have covered in the news onKriptokoin.com, many experts expected cryptocurrencies to act as a safe-haven asset like gold during the Russian invasion of Ukraine. But cryptos did not rise the way gold did in the early days of this geopolitical crisis or in the past few months. However, Frank Holmes disagrees and explains his views as follows:
Sure, Ethereum dropped to $2,400 but bounced back to $3,500. It’s currently under $3,500. From the lows of February 24, when the war began, both Ethereum and Bitcoin rose.
“Don’t sell gold and Bitcoin now, it’s too cheap”
Frank Holmes talks about some of the challenges for cryptocurrencies and says the biggest upside is regulation. According to the expert, there is great pressure from politicians in the USA. The expert hopes to work together to understand that Canada, regulators and politicians must embrace young taxpayers. “Buy at the bottom and stay hodl,” says Frank Holmes, advising investors to stay on the upswing:
All those gold beetles, make sure you tell your gold CEOs to stay hodl because they’re free have cash flows. That’s what we do at HIVE. We are mining Bitcoin and we are holding it because we believe it will go higher. If I’m a gold miner and producing it, I have free cash flow. I have to hold. Don’t sell now, it’s too cheap.
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