Elon Musk slams ‘heavy-handed’ Fed as ex-BitMEX CEO sees $1M BTC price
2023.03.30 13:34
The United States Federal Reserve has been “too heavy-handed” in taming inflation, said pro-Bitcoin (BTC) Tesla and Twitter CEO Elon Musk.
In a Twitter debate on March 29, Musk directly criticized U.S. macroeconomic policy, including “excess government spending.”
Musk: Fed policy is a “serious issue”
Bitcoin and crypto markets remain extremely sensitive to Fed cues on interest rate policy.
Despite inflation gradually coming down, the Fed has continued to hike rates even as banks feel the pressure and several collapses.
For Musk, this is already a case of going too far — with banking crisis contagion spreading to Europe, the U.S. dollar, he agrees, is quickly losing appeal.
In a response to a thread on dollar supremacy by Genevieve Roch-Decter, CEO of financial insights firm Grit Capital, Musk did not mince his words.
“Serious issue,” he wrote about the greenback potentially losing its status as the world’s reserve currency.
“US policy has been too heavy-handed, making countries want to ditch the dollar.”
His words come as various countries enact a shift away from U.S. dollar trade, these focused on China, which has begun transacting in yuan with foreign partners.
A further tweet from Musk added that the problem was made worse by the Fed, “Combined with excess government spending, which forces other countries to absorb a significant part of our inflation.”
Related: US enforcement agencies are turning up the heat on crypto-related crime
Markets remain split over how the Fed will act in the future. With the next rate hike decision not due for over one month, bets almost equally favor another 25-basis-point hike and a pause, according to data from CME Group’s FedWatch Tool.
Fed target rate probabilities chart. Source: CME Group
Fed fuels hyper-bullish BTC price bets
Some believe that given the severity of the banking crisis, the U.S. will have little choice but to reverse its policy.
Related: Bitcoin spikes above $29K as ‘fakeout’ fuels BTC price strength doubts
Among the most vocal is Arthur Hayes, former CEO of crypto exchange BitMEX, who earlier this month released a dedicated roadmap covering how he thinks events will unfold.
In one of several recent tweets, Hayes doubled down on the rosy future for Bitcoin as result, giving a price target of $1 million.
Amid regulatory attention for fellow exchange Binance, meanwhile, he described BTC price action in 2023 as a “bull market powered by FUD.”
BTC/USD traded at around $28,300 at the time of writing on March 30, according to data from Cointelegraph Markets Pro and TradingView.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
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