The crypto and equity markets have rebounded strongly since the March lows, but the capital markets remain tight. So tight that to save individuals and corporations in all weight classes, so to speak, the Federal Reserve intervened with a trillion dollars in stimulus.
This is a trend which analysts say is beneficial for the cryptocurrency market. especially bitcoin
Related Reading: After Raising 150% From The Lows Of $ 3,700, Bitcoin Is Far From Reaching A Higher Level
Federal Reserve Balance Sheet Continues to Increase
According to Charlie Biello, compound capital advisers, the American central bank. The US Federal Reserve announced on Thursday that its balance sheet recently reached $ 6.934 billion, an increase of $ 2.6 trillion in the past two months. This is by far a record, the last balance being $ 4,516 billion in January 2015.
Related Downloads:
Charlie Biello Federal Reserve Balance Sheet, Compound Capital Advisors.
What is crazy is that the Federal Reserve may not have finished pumping money into the economy yet, which could help the crypto market even more. more than it has already done.
Federal Reserve Chairman Jerome Powell said this week that the United States is going through its greatest modern recession, saying that the United States could experience an "unprecedented" economic blow.
According to the New York TimesAdded the economist who, even with the existing stimulus packages, "I think there is a growing feeling that the recovery will take place more slowly than we would like".
While the Federal Reserve is still operating current facilities and you may be planning more, especially if the sluggish economic conditions persist, your balance sheet and money supply may continue to skyrocket, adding to the value of Bitcoin and the decentralized cryptographic assets.
Crypto stands out to benefit from it
Yes, it is unlikely that central banks will buy Bitcoin directly as they do with bonds and other asset classes, but cryptocurrencies could benefit greatly from all of the incentives.
In fact, Teddy Vallee, founder and CEO of Pervalle Global, a global macro-hedge fund, recently published The table below.
Although the investor was reluctant to label the chart as perfect, he explained that there is a possible correlation between the total amount of assets of the global central banks (Federal Reserve, Bank of Japan, etc.) and the value of Bitcoin on a logarithmic scale.
The most convincing opinion over the next 1 to 3 years is that the BC balance sheets are headed upwards. Given this premise, it seems that the best form of expression comes through $ BTCUSD. While the table below should prove itself, it has a weight both empirical and intuitive. pic.twitter.com/GIjOa15hJ4
– Teddy Vallee (@TeddyVallee) April 23, 2020
Analysts have also discussed the fundamental side of this idea.
Paul Tudor Jones, a legendary macro-investor who announced last week that he was supporting Bitcoin, argued in a note titled "High Monetary Inflation" that he was revisiting Bitcoin because it wants to protect its capital against inflation due to the stimulus.
As to where exactly Bitcoin and crypto will trend due to the stimulus, analysts are not entirely sure.
However, Antoni Trenchev, CEO of crypto startup Nexo, recently released a price forecast based on stimulus and halving in tandem. According to previous NewsBTC reports, this level is $ 50,000.
Photo by Pepi Stojanovski on Unsplash
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