Yahoo Finance Live’s Jared Blikre discusses how bitcoin is moving following the release of February CPI report data.
Video Transcript
JARED BLIKRE: Crypto’s rally is back on after February’s cooler than expected inflation report, Bitcoin breaking the $26,000 level threshold amid worries over the regulatory environment and risk in the banking system. Its price action now suggests a bullish streak ahead.
Let me get to the YFi Interactive. I don’t know how cool we could say this morning’s inflation report was, at least on the service side. But nevertheless, I’ve been saying for quite a long time, several months now, that Bitcoin has been leading the way for risk markets on a lot of these reports, Julie, that deal with inflation, the big jobs report, Powell standing up in front of people and opening his mouth, all of these things seem to hit Bitcoin disproportionately more. And now we have it bumping up against former price resistance at the $25,000 level. I could go into some technical analysis here. But any comments on the great crypto rally?
JULIE HYMAN: Yeah, two comments. We spoke to two guests today who cited crypto as one area that still could cause risk in the system, which I thought was quite interesting, unprompted. Not necessarily surprising that Bill Smead would say something like that, because he follows Buffett and Munger closely, and Munger has been very anti-crypto. We also heard Matt Miskin of John Hancock mention that, that that would be an area to focus. So price action aside, that’s something I think people need to keep in mind.
The other thing that I find absolutely bonkers bizarro is that people seem to be flowing into crypto over the past few days, because they said, well, this was a failure of the banking system. DeFi and crypto is now– this solidifies our view that that’s the answer, which is just a little bit confusing to me, shall we say.
JARED BLIKRE: If Gary Gensler has demonstrated anything, it’s that crypto is under the big thumb of the United States regulatory agencies, at least going forward. I think it’s going to be heavy-handed in that regard.
I will say this– in this part of the business cycle, where we see the Federal Reserve having hiked already a lot and now just beginning perhaps to step on the brake, or at least lift its foot off of the brake here, at this point of time is when gold usually takes off. And so we’ve seen gold futures perk up over the last couple of days.
Here is a year-to-date chart. Let me just get a longer term. Here’s a one year chart. And you can see this latest liftoff is only a few days worth, but really occurring with the same fervor that we saw interest rates move over the last day in reaction to what the Fed is doing. So if the Fed and the other federal authorities here are creating moral hazard by guaranteeing all deposits and we’re seeing gold perk up and Bitcoin is right there with it, maybe there are some parallels there.
But I will say, historically, this is a time when gold starts rallying in the business cycle. People are saying, why was gold not rallying last year. It’s because the Federal Reserve was way too hawkish. And historically, and we can watch this pan out over several cycles previous, that does not happen.