Bitcoin Demand Set to Skyrocket: Grayscale Executive

Zach Pandl, Grayscale’s managing director of research, believes that store of value assets like Bitcoin will remain in high demand due to ongoing government overspending and high interest rates in the United States. 

Pandl suggested that persistent inflation and unsustainable budget deficits will drive continued interest in Bitcoin as a hedge against economic uncertainty.

Bitcoin and Inflation

According to Pandl, the Federal Reserve is unlikely to lower interest rates soon due to high inflation rates, but upcoming events like the Bitcoin halving and increasing economic growth will support Bitcoin’s price. 

He anticipates that factors like booming nominal growth and adoption trends will create a supportive environment for crypto markets.

“The Fed won’t be able to cuts rates for a while with core inflation this high, but booming nominal growth, the Bitcoin halving, and adoption trends like tokenization should create a supportive environment for crypto markets,” said Pandl.

Inflation Data Supports Pandl’s Concerns

Recent inflation data supports Pandl’s concerns, with March seeing a rise of 0.4% month-on-month and 3.5% year-over-year. This high inflation could prolong the Fed’s policy of maintaining higher interest rates, as noted by EY chief economist Greg Daco.

Pandl acknowledges that while higher real interest rates may temporarily impact crypto, there will be sustained demand for store-of-value assets in the long term. 

However, spikes in the 10-year real interest rate have historically correlated with declines in Bitcoin’s price, indicating investor sensitivity to interest rate changes.

Bitcoin and CPI Information

Following the recent release of CPI information, Bitcoin experienced a minor price drop, reaching an intra-day low of $67,463 on Coinbase. However, it has since rebounded to $70,640 at the time of writing. 

Analyst Matthew Hyland identified an ascending triangle formation in the Bitcoin price chart, noting a new resistance level above $71,500.

Overall, Pandl’s analysis underscores Bitcoin’s growing role as a hedge against economic volatility and inflation, even amidst short-term market fluctuations.

Price Predictions for BTC

 A pseudonymous analyst known as TechDev recently said that Bitcoin price could double from its current value of $69,000 within the next three months. The price action of the leading digital asset has closed two consecutive months above the upper Bollinger Band, a technical indicator used to measure momentum and volatility. 

Additionally, with the persistent decline of the Argentine peso (ARS), the demand for BTC in the region went up. As reported earlier by TheCoinRise, Bitcoin demand in Argentina went to a two-year high in late March.