Search Inside Bitcoins

Bitcoin Climbs to $9.2K as Fed Stimulus Spurs Demand

Swiss Financial Market Supervisory Authority
Swiss Financial Market Supervisory Authority

Join Our Telegram channel to stay up to date on breaking news coverage

On Thursday, Bitcoin stood as one of the biggest gainers after the Federal Reserve rendered benchmark lending rates to almost zero. This, of course, hinted at the possibility of providing further stimulus should it be deemed necessary.

Massive Price Rise In BTC

The world’s first cryptocurrency popped 4.98%, hitting a seven-week high at $9,233. Furthermore, the currency has managed to maintain these gains as it went further along the day. This upwards movement came in spite of the Fed painting a gloomy picture for the medium-term economic outlook. Of course, the economic turmoil has been caused by the ever-spreading Coronavirus pandemic.

Through a press brief that occurred on Wednesday, Jerome Powell, the Fed chairman, stated that it’s expected for the US economy to shrink even more. This is primarily due to three factors, according to Powell: the loss of productive capacity that social distancing caused, the uncertain virus curve, as well as the global dimension of the crisis at large.

Mike Novogratz Believes This is Bitcoin’s “Moment”

Fed Taking Every Measure To Keep Economy Afloat

The Federal Open Market Committee, in turn, stated that the Fed will make aggressive, forceful, and proactive actions in order to safeguard the economy of the US. The Committee stated that the Fed is prepared to leverage the full range of tools it has in order to support the US economy during these trying times.

As a testament to this, the central bank has maintained interest rates new March 15 levels, that is between the range of 0% and 0.25%. The Fed promised to hold this range stable until it sees that the US economy has achieved the maximum price stability and employment goals

Other Potential Reasons

The move from the Fed had boosted gold, US equities, as well as Bitcoin. However, Samson Mow is convinced that there is a whole other reason Bitcoin is getting boosted, one that doesn’t involve the US Central Bank: The Bitcoin halving.

Mow stands as the CSO of the Blockstream blockchain technology firm. On Thursday, he stated that Bitcoin drew in higher demands from traders as they gear up for the mining reward halving, which is expected to occur on the 12tkh of May, 2020. With this halving, the daily production of Bitcoin will drop from 1,800 BTC a day, to 900 BTC a day. This represents the complete opposite of what the Fed is trying to do, with it printing more USD in order to try and compensate for the crisis

Join Our Telegram channel to stay up to date on breaking news coverage

Read next