Dan Morehead, CEO and founder of leading blockchain venture fund Pantera Capital, stated that digital assets will be the “best place” to store capital following the potential fallout of interest rate hikes from the United States Federal Reserve.
Investors across stock and crypto markets are currently fixated on the direction the Fed might take to combat rising inflation, which topped 7.5% as of this month.
Bitcoin and crypto markets have often moved in correlation to trends in the stock market; however, Morehead argued in his Wednesday newsletter that bonds, stocks and real estate will cop the brunt of the Fed‘s “massive policy U-turn” in relation to hiking interest rates.
Despite the crypto market suffering a downturn since late 2021, the CEO suggested that digital assets will be the “best place” to store capital during the fallout of the Fed’s actions:
“I think our markets will decouple soon. Investors are going to think: bonds are going to get crushed as the Fed goes from the only buyer on Earth to seller. Rising rates will make equities and real estate less attractive.”
“So, where does one invest when both stocks and bonds are falling? (Normally they are negatively correlated.) Blockchain is a very legit place to invest in that world,” he added.
To add to his point, Morehead also highlighted a previous statement he made during a conference call with investors earlier this month in which he pointed out that asset classes such as gold and crypto don’t directly correspond to interest rates as bonds do.
