One of the most well-known Bitcoin theses is that it is an asset not to be, with the Goings – on on Wall Street – the traditional world-in connection. Although this is true, apparently, to a majority of the first years, affected in the last few years, macro-economic and geopolitical Trends on the crypto money market.
This was accentuated when, in March – to sell to a global liquidity event, when investors rushed in all markets, their assets for US dollars.
12. March fell stock, commodities, Bitcoin, and even precious metals at the same pace, and experienced the worst trading days for years. This day has since been referred to as “Black Thursday”.
However, the effect of the traditional financial industry has on Bitcoin could be a good thing – because of the Bull-Run of the Assets recently received a massive boost in the call for negative interest rates in the United States is becoming louder and louder.
Negative interest rates in the United States?
In the last few weeks has developed the economic situation worldwide is getting worse, in spite of the 35% rally in the S&P 500, and similar gains in assets such as Bitcoin and Gold.
These Trends counteract, set the Central banks and governments of the world, excessive fiscal and monetary incentives, more than ever, to save company to save people and ultimately save the company. This is a step that has brought the cops in Bitcoin to the quake.
In just the past two months, the US Federal reserve has increased its balance sheet to more than 2.3 trillion dollars, which represents an increase of 50% compared to the balance at year-end 2019. And that is not enough, analysts say.
Narayana Kocherlakota, an economist, who was from 2008 to 2014 as President of the Federal Reserve Bank of Minneapolis, wrote recently in a Bloomberg article with the title “the Fed Should Go Negative Next Week”. In it, she outlined a Negative-interest rate Plan for the U.S. Central Bank. This was picked up at the end of last year by Alan Greenspan, a former Fed Chairman.
Tyler Winklevoss, co-founder of Gemini, and a prominent Bitcoin bull, commented chef lakotas article with the below Tweet, and emphasizes that he considers this step to be unprecedented, and potentially dangerous.
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Why Bitcoin is a solution
Many now expect that Bitcoin will benefit from this Trend.
Unlike cash, whose attitude could be due to negative interest rates soon, expensive, Bitcoin is a return of 0% and is due to the existence of semi-structuring, a relatively deflationary currency.
In addition, it is assumed that with negative interest rates and an increasingly bizarre monetary policy, the slow (but getting faster) depreciation of the Fiat currency goes hand-in-hand, which should prove to be an advantage for a limited and decentralized form of money like Bitcoin or Gold.