Online Blockchain CEO Clem Chambers has predicted that Bitcoin will crash in the coming months if the Fed increases interest rates and the FTX issue goes unresolved.
In a December 10 interview with Kitco News’ David Lin, Chambers pointed out that if the Fed wants to stop inflation, it would have to keep raising the rates until something breaks. Chambers believes that something will result in a market crash in the crypto sector.
Inflation had reached a record high of 9.1% in June 2022 but has since dropped to 7.7% in October.
Chambers Predicts More Storm Ahead
Although there has been a significant decline in the value of cryptocurrencies and stocks this year, the CEO does not believe that we have seen the end of it.
“Everyone remembered the big drop in 2008, but there was a bear market in 2007, which was an oncoming storm,” he said. “I think what we’re in now is potentially an oncoming storm.”
Chambers further advised that investors should focus on cash and use that as a hedge against the declining value of stocks. “I’d prefer to have my money in Benjamins than in Facebooks,” he added.
This is contrary to the common opinion in crypto, where many are bullish on Bitcoin as the hedge against inflation. Chambers said he plans to save cash until the market reaches a bottom and then pile into bargain assets.
However, he advised that investors should invest in high-risk companies. “Snap a little bit of money off your pile and put it to one side and [invest in] high-risk stuff.”
Bitcoin Could Crash to $8k
Meanwhile, Chambers stated that FTX collapse could see Bitcoin crash to $8,000. He said this while speaking with Daniela Cambone of Stansberry Research in a Dec. 5 interview.
In his view, the impacts of the FTX crash are yet to fully reflect in the Bitcoin price. When the contagion spreads fully and affects multiple exchanges, he predicts BTC could even go as low as $7,000.
He also criticized centralized exchanges saying, “The whole point about crypto is it was decentralized. Exchanges are not exchanges at all, they’re banks where you deposit your money.”
However, he expects that there will be a turnaround, perhaps by 2024, since it will take at least 18 months for the market to recover.
Disclaimer
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.
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