min to read

2019-09-18 16:32:18




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Opinion: the new FED currency injections will lead to an increase in Bitcoin price

FED and BTC

min to read

2019-09-18 16:32:18

The latest steps of the Federal Reserve System (FED) on the foreign exchange market may cause a new wave of bitcoin price growth.

The latest steps of the Federal Reserve System (FED) on the foreign exchange market may cause a new wave of bitcoin price growth. This opinion was expressed by a number of well-known representatives of the cryptocurrency industry.

 

On Tuesday, September 17, a significant increase in rates on the repo market (securities purchase/sale transactions with an obligation to resell them) forced the FED to resort to providing liquidity for this instrument for the first time in a decade. Thus, if on Monday repo rates increased from 2.29% to 4.75%, then on Tuesday they exceeded 10%.

 

Repo rate jumps usually happen at the end of the quarter, sometimes at the end of the month. The mid-month surge was linked to a series of events that had led to an imbalance between the liquidity reserves in the banking system and the volume of securities on the dealers' balance sheet, including tax payments by companies, payment on treasury auctions held last week. A recent drone attack on oil facilities in Saudi Arabia could also have an impact.

 

In total, the FED issued $ 53.15 billion out of a possible $ 75 billion to cover the US dollar deficit on the foreign exchange market. Although this event has not had a serious impact on the dynamics of the stock market and the dollar, representatives of the cryptocurrency industry believe that it can have favorable consequences for the bitcoin price.

 

Arthur Hayes, the head of the cryptocurrency derivatives exchange BitMEX, believes that saturating the economy of the money supply will lead to a further loss of faith in fiat currencies, and advises to prepare for the fact that bitcoin will again test the level of $20,000.

 

 

The CEO of the leading European exchange Bitstamp, Nejc Kodric, also wrote that investors should probably start opening long positions on bitcoin.

 

 

It is noteworthy that today the FED will also announce the results of its September meeting. The consensus forecast of analysts, collected last week, assumes that the regulator will reduce the interest rate by 0.25%.

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