FalconX CEO Says BTC Is A Hedge Against US-China Trade War

The FalconX CEO Raghu Yarlagadda cited the inflationary hedge and geopolitical risks as the main reasons why Bitcoin can act as a hedge on the markets. He cited three reasons for the major institutional interest in crypto so let’s discuss more them in today’s Bitcoin news.

Bitcoin’s recent price surge and the institutional interest are hot topics now so the FalconX CEO explained why institutional investors keep going for BTC and whether that is really pumping its price. Yarlagadda said:

 “The first and foremost reason is the inflationary hedge. As the world is printing more money, it is very clear that Bitcoin is emerging to be one of the inflationary hedges.”

Yarlagadda said that the second reason is  not as obvious but all the last ten institutions which came to FalconX mentioned that the geopolitical risk hedge:

 “With the new US administration coming in, there are a lot of people who say that the trade war between the US and China is going to aggravate just a little bit more.”

BTC tends to do well from a perspective whenever American-Chinese relations seem to be destroyed as he explained. In a recent conversation with Morgan Beller who is a general partner at NFX, ETH creator Vitalik Buterin said that conflicts between China and the US are good for cryptocurrency even though it has an overall negative sentiment for humanity. The third reason for the institutional interest is the “mechanics of 24/7” and the institutions appreciate that they have easy access to BTC All the time despite the countries and boundaries while stock markets are not open on the weekends.

Raghu Yarlagadda explained that Tesla is the main example of a company that invested in BTC went against the gain and made a bet against inflationary fiat currencies on the balance sheets as Tesla’s CEO disclosed that it had converted $1.5 billion:

 “Most of the companies that we see are trying to get the inflationary hedge on their balance sheet, it’s usually 1-2%. And that is remarkably similar across the companies that we’ve seen.”

Tesla is at 8% right now which makes the company an outlier in addition to the size of the investment”

 “What we’ve seen in the market through our own desk and analytics that we capture on chain, I don’t think there is a major corporation buy, one way or the other, in the last five days.”