Central banks flood markets with money – can benefit from Bitcoin?
The Fed is planning the purchase of “Junk”bonds, in order to combat one of the corona viruses caused economic decline. However, the experts have mixed feelings about it.
In a last desperate attempt, the shrinking of the economy to maintain, has presented the US Central Bank plans to buy “Junk”bonds, are much riskier investments. Commentators argue that this could speak for Bitcoin, but the price could threaten.
The US Central Bank has expanded its stimulus efforts, and 2.3 trillion dollars of economic support added, in order to provide “relief and stability,” said the Chairman, Jerome Powell. This includes arrangements for small and medium-sized enterprises in the Form of a loan Fund in the amount of $ 600 billion, and the purchase of short-term bonds in the amount of 500 billion dollars from the Federal government, States, counties and cities across the country.
The real Kick to the obligation, to buy “junk”bonds, however, so-called Junk bonds, which are called due to the inclination of their issuers in payment default. The determination of the Fed is to serve as a lifeline for companies that have been downgraded in the Wake of the economic Implosion down. According to Charles Bovaird, Vice President of Content, Quantum Economics, could play this “unprecedented” step of Bitcoin and directly into the hands.
The step by the Fed to buy junk bonds, and help to support so-called fallen angels, is unprecedented. In addition, it could easily be interpreted as a step to help in the support Investment-Grade bonds of companies, the fundamental overstatement of the values were traded.
Bovaird argues that the perceived Overreaction by the Fed, could the confidence in the financial system continue to undermine.
An important impetus for the creation of Bitcoin is the development of a new economic system, independent of the banks and the government functioning was. Many people also have no confidence, and the Big financial crisis gave them a particularly good reason to be suspicious.
Similar to Mati Greenspan, the founder of Quantum Economics, commented on the rise in the balance sheet of the Fed and tweeted:
Most worryingly, the decision to begin the purchase of junk bonds on the market is the most. The death of capitalism is completed.
Fed’s balance sheet as of Wednesday was at $6 trillion and is only set to rise rapidly from here.
The most worrying part is the decision to start buying junk bonds from the market. The death of capitalism is complete. pic.twitter.com/0UBOR8mKGt
— Mati Greenspan (tweets are not trading advice) (@MatiGreenspan) April 10, 2020
The Economist and co-founder of Real Vision Group, Raoul Pal, pointed out in a similar way, a connection between aggressive fiscal Stimuli, and the use of Bitcoin.
The more extreme monetary policy measures are in the world, the more convincing the arguments for Bitcoin in the course of time. In the next 12 months, probably a lot more will come from the Central banks.
While the recent efforts by the Fed to revive the economy could strengthen the reasoning of Bitcoin, could have the aggressive tactics of the a further advantage. If other tools are to be introduced, and the broader markets to recover in the short term, could be the excess of Stimulus on the crypto markets leakage. As Marcus Swanepoel of Luno in a previous Interview, said: “Any kind of Stimulus is more money in the System”.
