Bitcoin Proponent Says Fed Is 'Too Tough' on Curbing Inflation, Tesla and Twitter CEO Elon Musk. In a Twitter debate on March 29, Musk directly criticized U.S. macroeconomic policies, including "excessive government spending."
Bitcoin and cryptocurrency markets remain extremely sensitive to hints of the Federal Reserve's interest rate policy. Despite a gradual retreat in inflation, the Fed has continued to raise interest rates even as banks are under pressure and several have failed.
It’s already a case of going too far for Musk who agrees that the dollar is rapidly losing its appeal as the banking crisis spreads to Europe.
Musk was blunt when responding to Genevieve Roch-Decter, CEO of financial insights firm Grit Capital, on dollar supremacy. "Serious problem," he wrote, that the dollar could lose its status as the world's reserve currency. "U.S. policy is too harsh and makes countries want to abandon the dollar." His comments come as several countries are shifting away from dollar trade, with a focus on China, which has begun trading in yuan with foreign partners.
Musk added in another tweet that the Fed made the problem worse, "combined with excess government spending, forcing other countries to absorb a significant portion of our inflation." Markets remain divided on how the Fed will act going forward. With the decision on the next rate hike not due in more than a month, the bets were almost equally in favor of another quarter-point hike and a pause, according to CME Group's FedWatch tool. Some believe that, given the severity of the banking crisis, the US will have no choice but to change its policies. The most outspoken of these is Arthur Hayes, former CEO of cryptocurrency exchange BitMEX, who earlier this month released a dedicated roadmap covering how he thinks events will unfold.
So, in a few recent tweets, Hayes doubled down on Bitcoin's bright future with a $1 million price target. Meanwhile, he described BTC price action in 2023 as a “FUD-driven bull market” amid regulatory concerns over peer exchange Binance. According to data from Cointelegraph Markets Pro and TradingView, BTC/USD was trading around $28,300 as of this writing on March 30.
