Among the most prominent Bitcoin narratives is that it is an Advantage Not connected with the going on’s of Wall Street, of the standard world. Although this was seemingly true for much of its first years, the last few years have seen macroeconomic and geopolitical trends impact the cryptocurrency market.
This was accentuated in March if there was an international liquidity event that saw investors in all markets hurry to sell their assets for U.S. dollars.
On March 12th, Stocks, commodities, Bitcoin, as well as precious metals all dropped in tandem, experiencing their worst trading days in years. That day has been dubbed “Black Thursday.”
However, the effect that classic fund has on Bitcoin could be a fantastic thing, with the asset’s bull situation lately obtaining an enormous increase as calls for negative rates of interest in the U.S. have mounted.
Negative Rates of Interest In the U.S.?
Over The last few weeks, the economic situation around the world has trended worse and worse, despite the 35% rally in the S&P 500 and comparable gains in other resources such as Bitcoin and gold.
To combat these trends, the central banks and governments of the world have gone into overdrive, embarking on more monetary and fiscal stimulus than ever before in an effort to save businesses, save people, and finally save society. It is a movement that has had Bitcoin bulls buzzing.
In the past two months alone, the U.S. Federal Reserve Has added over $2.3 trillion to its balance sheet, which is a 50% increase in its year-end equilibrium for 2019. However, it is not enough, analysts are saying.
Narayana Kocherlakota, an economist who served as president of this Federal Reserve Bank of Minneapolis in the six years after 2008, lately penned a Bloomberg article titled “The Fed Must Go Negative Next Week” outlining a case for the U.S. central bank to bring rates to the negative. This was echoed by Alan Greenspan, a former Fed chairman, late last year.
Tyler Winklevoss, the co-founder of Gemini and a dominant Bitcoin bull, commented On Kocherlakota’s article with the tweet found below, accentuating the way he believes this move would be unprecedented and possibly dangerous.
Why Bitcoin Is a Solution
The idea goes that Bitcoin stands to profit from this trend.
Unlike money, which soon may require shortly be expensive to hold because of Negative rates of interest, Bitcoin provides a 0% return and is a comparatively deflationary currency because of the occurrence of halvings.
Moreover, the idea goes with negative interest rates, with increasingly bizarre financial policy, Comes the slow (but increasingly rapid) debasement of fiat money, Which should prove to be a benefit for a rare and decentralized form Of cash like Bitcoin or gold.