The Federal Reserve has slashed interest rates to zero in an attempt to prop up the struggling U.S. economy that was hit by the coronavirus crisis. To top that off, the central bank also kicked off a gargantuan $700 bln quantitative easing (QE) program.
As expected, the cryptocurrency community perceived this aggressive monetary stimulus as bullish news for Bitcoin whose supply is fixed at 21 mln coins.
QE is a gift for Bitcoin
Trader and cryptocurrency analyst Luke Martin (a.k.a ‘Venture Coinist) is convinced that the stage has already been set for Bitcoin to succeed in the long-term.
The rationale behind such statements is very simple -- QE significantly increases the supply of the U.S. dollar. Subsequently, Bitcoin, which will become even more scarce during the May halving, is expected to trade stronger against the greenback.
Kraken CEO Jesse Powell suggests that it’s a good time to go long on Bitcoin, asking how he can take a loan with zero interest.
Some remain skeptical
Bitcoin’s 40 percent crash that left bulls aghast on March 12 has dampened the enthusiasm of the crypto community, which is why many of its members took the Fed news with a dose of skepticism.
When Tyler Winklevoss, the CEO of crypto exchange Gemini, tweeted that Bitcoin is a hedge against rate cuts and QE, but some of his followers, including crypto trader John Rager, were quick to point out that the Thursday crash effectively invalidated his claim.
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