Bitcoin falls 6%, following the possible reduction of the Fed’s balance sheet in the United States

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Bitcoin fell to its lowest price for the month. Just as the minutes of the last meeting of the US Federal Reserve, held in December, showed officials discussing the idea of ​​reducing the Federal Reserve’s bulging $ 8.3 trillion balance sheet.

Cryptocurrency prices rallied in recent years as a growing number of investors bet that more than $ 4 billion printed by the Fed to support the economy and markets hit by COVID-19 would accelerate a rapid inflation. These investors were confident that Bitcoin would serve as a hedge asset against rising prices.

Therefore, a corrective move by the Fed to reduce the balance sheet could put downward pressure on Bitcoin and the cryptocurrency market in general.

“Some participants judged that a significant amount of balance sheet shrinkage might be appropriate during the market normalization process, especially in light of abundant liquidity in money markets.” He showed the minutes of the Federal Reserve meeting held from December 14-15 last year and released Wednesday afternoon.

 CoinMarketCap CoinMarketCapThe price of Bitcoin fell almost 6% this Wednesday, positioning itself at $ 43,835, the lowest price since December 4 of last month. Source: CoinMarketCap

However, Bitcoin, despite the obstacles of regulatory institutions, gained around 60% of its price during the year 2021.

According to Goldman Sachs, Bitcoin outperformed all capital markets in 2021

Taking as a reference the market capitalization of almost $ 800,000 million of Bitcoin. Goldman Sachs said that Bitcoin currently holds a 20% share of the total “store of value” market.

“Bitcoin is likely to become a larger share over time,” said Goldman Sachs.

 Twitter Twitter TwitterThe performance of stocks in the world’s largest sectors such as oil, S&P 500 and gold, averaged 31%. It’s quite a lot, but it still pales in comparison to Bitcoin’s 60% return. Source: Twitter

Meanwhile, gold appears to be losing its hold somewhat. The precious metal posted a return of just 4% during 2021. Younger generations seem to be turning away from gold and into Bitcoin. Asset often referred to as the new “digital gold.”

Likewise, Goldman Sachs Group has restarted its cryptocurrency trading tables. And it will start trading Bitcoin futures for exclusive clients starting next week, according to ..

The next few years could be even more momentous for Bitcoin and cryptocurrencies. As the adoption of these assets by the population and governments grows. Also added to the exponential growth that the NFT and DeFi sector has had during 2021.

However, government regulations will be an obstacle for Bitcoin, although it appears that most countries are positively embracing the digital asset. If the threat of regulatory uncertainty is removed, Bitcoin could experience much stronger growth during 2022.

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