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Celsius Network CEO Alex Mashinsky believes that 2022 will be a year of volatility and uncertainty amidst fears of the Omicron variant, the possibility of monetary tightening by the Federal Reserve, and the rising inflation. With such factors in play, he opined that gold and Bitcoin (BTC) could be considered safe assets to invest in.
In a recent interview with Kitco News, Mashinsky was asked about the possible investment themes for 2022. “Obviously, we’re seeing plans of tapering… and also plans for higher interest rates or this corona variant may scuffle that and we will have even more money printing next year,” he replied. “We are at the cross in the road and no one really knows which way it’s going to go.”
If inflation continues to rise, the Fed will likely try to bring it back down, which may affect the prices of all asset classes including gold and Bitcoin. Mashinsky suggested a wait-and-see approach to see what happens next.
“But if we see inflation continue to rise, we’re seeing the Fed really locking horns with inflation trying to put it back in pandora’s box,” the Celsius CEO added. “Then I think we’re going to see asset classes including Bitcoin and gold actually take a hit first and then they may recover and go higher. Everything is going to take a hit first if tapering and the interest rates are going to rise. You have to wait first for at least a few more months to see which way the economy is going.”
In a scenario where the inflation rate is out of control, Mashinsky believes that Bitcoin and gold are the right assets to invest in. “If there’s a lot of volatility because inflation is out of control [and go into] the double digits then gold and Bitcoin are going to become safe assets,” he explained. “But, if we have single-digit inflation and the Fed is fighting it, then all assets are actually going to lose value because everybody is going to be hurting.”
Even if inflation is under control, Bitcoin and gold will still be safe assets since all asset classes will rise higher. “And, if the opposite…if the Fed decides that inflation is not an issue and they can accommodate longer, then all asset prices are going to go up,” he added. “So, we have several scenarios here and we have to watch very carefully what happens with each print each month and make decisions based on that.”
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