The potential reduction in interest rates by the US central bank is clearly one of the reasons for the recent increase in Bitcoins (BTC), said the managing director of Deutsche Bank Jim Reid in an interview with CNBC on June 26. Does Bitcoin owes its recent success to the US central bank?
Reid, head of global credit strategy at Deutsche Bank, stated:
"If the central banks are so aggressive, the alternative currencies will start to be a bit more attractive."
Reid referred to the recent Fed chairman Jerome, who said that the central bank is considering a rate cut under the conditions of current economic uncertainty and inflationary risk. As a result, the US dollar (USD) fell against the euro (EUR). According to analysts, this is the effect of lower interest rates expected by the market.
Bitcoin gains thanks to the Fed?
In the meantime, Bitcoin continued to record record results in 2019. Even today - despite the correction - it is already above USD 11,000, while its market capitalization increased above USD 200 billion, with the rate of domination in the cryptocurrency market reaching the level of over 60 %. This ratio has not been so high since April 2017, which is the period of the last speculative bubble.
Reid also noted that the recent cryptocurrent price jump is partly caused by the upcoming Facebook crypto project - Libra, which has been rumored for many months, but we know the official information since 18 June. Since then, Bitcoin has grown by over 30% from approximately 9,000 to approximately 13,000 USD, according to data from CoinMarketCap.
In the interview, Reid also repeated his negative attitude to the Fed's policy. He added that the existing fiat-based currency system was unstable and was approaching the end of its existence. In other words, the financier criticized the continuous printing of money by the banks, warning that it could lead to the end of paper money.
Only that the United States is not alone. In recent weeks, the President of the European Central Bank Mario Draghi has also suggested new interest rate cuts. It's good for Bitcoin, but for the global economy ... Well, we can have difficult times.
What is your opinion about the impact of Fed policy? Will it affect BTC?
Topic: Will bitcoin gain thanks to the Fed? (Read 148 times)
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