According to a venture capitalist, the November 2022 crypto bottom was correctly identified by a caller. He believes that the current crisis within the US banking system is bullish for long-term prospects for digital asset markets.
Chris Burniske is a Placeholder partner and it was a long thread on Twitter. tells His 257,500 followers believe that the banking crisis will lead to disinflation and not hyperinflation.
According to the venture capitalist, the Federal Reserve’s Bank Term Funding Program (BTFP), which aims to provide liquidity to struggling banks, will not have the same impact as the fiscal stimulus directly given to US citizens at the height of the Covid-19 pandemic.
“Current banking crisis is bullish for crypto long run. Short-term we’re likely in the eye of the storm, so expect volatility, but the banking crisis has been monetary policy-induced (too much, too fast with rate hikes) and will be ‘solved’ by monetary policy.
I believe that this banking crisis is more likely than hyperinflation to cause disinflation. Credit is becoming less available. BTFP isn’t the same as ‘stimmies’ – stimmies went straight to consumer spending, whereas BTFP is shoring up bank balance sheets which is likely to just sit there.”
Burniske says It is expected that disinflation will encourage the Federal Reserve (Federal Reserve) to begin lowering interest rates. Burniske predicts that the Fed pivot could lead to the resurgence crypto.
“But disinflation will give the Fed and other central banks cover to lower rates, and that will breathe air back into the fire of growth stocks and crypto.”
According to Placeholder executives, he sees The Fed and other central banks are dropping interest rates in the first quarter of this year.
“Fed and other Central Banks will drop rates, perhaps even this year, as the market is now anticipating, which will allow existing bonds to rally and voila, banks that are currently struggling will have ‘healthy’ balance sheets again.”
Burniske says that he’s bullish on blockchain and crypto regardless of the macroeconomic landscape.
“I’m as long crypto as I’ve ever been – blockchains are critical infrastructure that provide solutions to the problems our society faces, including AI. As a species we find our way eventually, even though the path is filled with stones and sticks. If you look up, there are blue skies.”
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