One Largest Takeaway from Fed Meeting: There is no Bitcoin Bubble
One Largest Takeaway from Fed Meeting: There’s no Bitcoin Bubble
Again, the two events affirmed that the cryptocurrency’s growing dependence on macroeconomic conditions to determine its market bias.
Fed Chairman Jerome Powell held from fostering their bond-purchasing program but introduced advice to keep it intact for a longer period. He noted that the Federal Open Market Committee would continue to buy $120 billion worth of debt every month before it achieves maximum employment and sustainable inflation over 2 percent.
Mr. Powell also said that his office would require additional measures, including a shift in bond-buying composition towards longer-dated maturities if needed. That also reduced the possibilities of tapering in the coming monthly obligations.
Bitcoin strikes $22,000 amid growing institutional adoption. Source: BTCUSD on TradingView.com
The information marked another occasion wherein a big corporation or an investor ventured into Bitcoin against their inflation fears. Earlier, hedge-fund managers Paul Tudor Jones and Stanley Druckenmiller, insurance behemoth Massachusetts Mutual Life Insurance Co., and businesses like MicroStrategy and Square invested in the benchmark cryptocurrency.
The move marginally showed a deteriorating short-term prognosis in the US economy, providing investors each of the cues to take their funds into perceived safe-havens, benefiting Bitcoin.
Fed Impact on Bitcoin
Released at Thu, 17 Dec 2020 06:45:28 +0000
Bitcoin is up about 204 percent this year.
Bitcoin closed above $20,000 on Wednesday for the first time in its lifetime, just as the Federal Reserve made a decision to preserve its dovish agenda for the coming years.
The Fed’s forward prognosis gives companies more reasons to allocate some of their portfolio to Bitcoin, primarily because the youthful asset is challenging the safe-haven status-quo dominated by golden. In his most recent interview with Bloomberg, Guggenheim Partners CEO Scott Minerd stated the Bitcoin price could hit $400,000 if investors start demanding it within their precious metal rankings.
The BTC/USD exchange rate climbed to $20,000 before the Fed meeting’s conclusion, pointing to traders’ anticipation that the central bank would extend its asset purchasing program in a near-zero lending rate environment.
On Wednesday, the benchmark cryptocurrency paved its way to the UK investment company Ruffer Investment Management’s balance sheets. They revealed about $744 million worth of BTC in their own reservations.
“Bitcoin has a great deal of the features of gold and at exactly the exact same time has an odd value concerning transactions,” he said.