Crypto is making positive noise as more people lose confidence in central banks, says billionaire hedge fund investor Stanley Druckenmiller.
Druckenmiller is bullish on crypto’s comeback, especially given the recent state of the global economy as the world battles both recession and inflation.
Druckermiller was recently interviewed by CNBC and criticized the US Federal Reserve’s radical monetary policy.
“I was just incredibly frustrated with what looked to me like a Fed that was just taking incredible risks.”
Fed Triggered Biggest Wealth Bubble In History?
Additionally, Druckenmiller says the Federal Reserve’s recent actions have created the largest asset bubble in history. He also warned that after these bubbles, there would usually be an economic collapse.
On the other hand, the Fed dismissed inflation-related issues at the time, emphasizing that it was not in its mandate.
Obviously, Bitcoin boomed in 2021, but it plummeted the following year following Fed monetary policy aimed at crushing inflation in 2022. In June, annual CPI rose 9.2% but has now fallen to 8.2%, according to August data.
While the hedge manager is happy with the way the central bank is handling inflation, he is skeptical that it will make it through next year without experiencing a recession. Overall, Druckenmiller is not so optimistic about the SEC’s actions to curb inflation.
Further, Druckenmiller continued and said:
“Let’s see what happens if we get a hard landing… You have to kill the dragon. And the chair is right. You will probably be in pain.”
This point is echoed by Fed Chair Jerome Powell, who recognizes that fighting inflation requires persistence in what they call “below trend growth”.
Druckenmiller Confident Crypto Will Climb Higher
At this point, Druckenmiller indicated that he is staying away from Bitcoin and other cryptocurrencies following further tightening by the Fed.
On the bright side, he predicts that once central banks change course, much like the Bank of England has planned, the value of the cryptocurrency is bound to increase.
Cryptocurrency will have a renaissance, especially with dwindling trust in central banks and many people turning to what crypto can offer.
Similar to gold, bitcoin is also seen as a hedge against inflation. More so, the crypto is even considered vastly superior to gold and heralded as “the new global money”, driving many central banks to avoid it like the flu.
The billionaire businessman and investor believes the effects of the central bank’s several months of immobility will linger and negatively impact the economy.
Crypto total market cap at $908 billion on the daily chart | Source: TradingView.com Featured image from The Hustle, Chart: TradingView.com