FX.co ★ Ben Bernanke: Bitcoin is a purely speculative asset

Meanwhile, the cryptocurrency fear and greed index has reached another low and still indicates panic among investors, which casts doubt on the further recovery of bitcoin and other altcoins, former Federal Reserve Chairman Ben Bernanke said in an interview that the world's first cryptocurrency is mainly used in the shadow economy and often for illegal actions and operations. Bernanke also doesn't believe bitcoin will become an alternative form of money.

Let me remind you that Ben Bernanke is an economist who served two terms as chairman of the US Federal Reserve System, from 2006 to 2014. He oversaw the Fed's response to the financial crisis of the late 2000s during his tenure as chairman.

As for the cryptocurrency market, in Bernanke's opinion, the value of bitcoins and other cryptocurrencies is changing very quickly (every minute), which indicates quite high risks that investors bear. In his opinion, bitcoin is a fairly successful tool that can be used as a speculative asset, but the idea of its alternative to paper money has failed. "If bitcoin were a substitute for paper money, you could even use it to buy groceries. But no one buys products with bitcoins because it is too expensive and inconvenient. In addition, product prices would be subject to higher volatility, expressed in bitcoins, so there is no stability here either," Bernanke said.

It's hard to disagree with the former Fed chairman here. Most recently, I told you about a study that evaluated bitcoin as a means of payment. Now few people use cryptocurrencies to pay for everyday goods, and the reason for this is not the problems of the past years, but the high cost of transaction fees and a long time for their processing. Until the moment when the problem is relevant, sellers will refuse to accept cryptocurrency as payment. Experts from Morgan Stanley believe that the situation may change in the near future. The study says that the Strike payment company, which recently announced a partnership with NCR and the Blackhawk payment firm, has every chance to quickly seize a free niche. This means that a large number of shops and restaurants in the United States will soon be able to accept payments in bitcoins. The Strike payment system will use the Lighting Network, which simplifies and speeds up data processing, making payments cheaper and faster.

But back to Bernanke. When asked whether, in his opinion, BTC is a means of saving or digital gold, Bernanke insisted that "it is a speculative asset," and the value of bitcoin, which is predicted to replace even gold, has not yet been fundamentally confirmed except for the belief in it on the part of the cryptocurrency community.

If we talk about technical trends, then after the largest sale, which was triggered by the collapse of the UST stablecoin and the Terra blockchain, the exchange rate has stabilized a little. At the moment, active actions in the area of $ 31,000 are needed for the development of the initiative on the part of the bulls, since fixing above this range will quickly return the trading instrument to $ 32,650, allowing investors to calm their nerves a little. Equally important will be the protection of the $ 29,400 level. The fact that bitcoin continues to enjoy support from major players may mitigate its further decline, which may occur if the bulls do not offer anything in this range. The decline in the US stock market, as well as the sharp drop in the NASDAQ technology index, will certainly drag bitcoin down further. A breakdown of the $ 29,400 level will send the trading instrument back to a minimum of $ 27,600, and then up to $ 25,700, which will turn the market upside down again and cause panic on the part of many investors.

The second most capitalized asset, ether, is doing no better. The focus remains on the $ 2,150 resistance. A breakthrough of this level will quickly return the ether to $ 2,295, and there is $ 2,430 very close, which will be a serious problem for traders. Only consolidation above will allow building an upward trend for the trading instrument with the prospect of updating the highs in the areas of $ 2,630 and $ 2,760. In the event of a return of pressure on ETH, purchases in the area of large support of $ 1,980, as it has been recently, are not excluded. A break in this range will be the reason for a hike to $1,840 and $1,690 - the lows of this year, where the major players will begin to actively act again.