First Mover: Trillions in Coronavirus Stimulus Bring Out the Bitcoin Bulls
CoinDesk
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4 years ago
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"It's exactly why bitcoin (BTC) was created," Michael Novogratz, CEO of the cryptocurrency-focused investment firm Galaxy Digital, told CNBC last week.
It's a common refrain heard these days from bitcoin bulls: The U.S. dollar and other currencies will eventually be debased by the injections of trillions of dollars of coronavirus-related aid and monetary stimulus by governments and central banks. That should, theoretically, strengthen the case for bitcoin, the oldest and largest cryptocurrency, as a hedge against inflation.
You're reading First Mover, CoinDesk's daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here.
Such predictions might eventually come true, but for now bitcoin investors are stuck in a holding pattern: The cryptocurrency pushed above $7,000 on Monday, but for the past couple weeks it has struggled to hold that level, which it hasn't reliably traded above since early March.
"A nice recovery from the lows leaves investors hopeful," cryptocurrency analysis firm Arcane Research wrote Friday in a report. "However, this is not yet reflected in the market sentiment."
Any inflation stemming from fiscal and monetary stimulus could take a while to appear – partly because of higher unemployment and a drop-off in economic demand could relieve upward pressure on consumer prices in the near term. In the U.S. alone, roughly 10 million new unemployment claims were filed during the last two full weeks of March, and JPMorgan economists predict that a report this week will reveal another seven million claims were filed last week. Bank of America says the lack of an effective policy response to control the spread of the virus will push 2020 global growth to a contraction of 2.7 percent, instead of an expansion of 0.3 percent.
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https://bit.ly/2URySqN
It's a common refrain heard these days from bitcoin bulls: The U.S. dollar and other currencies will eventually be debased by the injections of trillions of dollars of coronavirus-related aid and monetary stimulus by governments and central banks. That should, theoretically, strengthen the case for bitcoin, the oldest and largest cryptocurrency, as a hedge against inflation.
You're reading First Mover, CoinDesk's daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here.
Such predictions might eventually come true, but for now bitcoin investors are stuck in a holding pattern: The cryptocurrency pushed above $7,000 on Monday, but for the past couple weeks it has struggled to hold that level, which it hasn't reliably traded above since early March.
"A nice recovery from the lows leaves investors hopeful," cryptocurrency analysis firm Arcane Research wrote Friday in a report. "However, this is not yet reflected in the market sentiment."
Any inflation stemming from fiscal and monetary stimulus could take a while to appear – partly because of higher unemployment and a drop-off in economic demand could relieve upward pressure on consumer prices in the near term. In the U.S. alone, roughly 10 million new unemployment claims were filed during the last two full weeks of March, and JPMorgan economists predict that a report this week will reveal another seven million claims were filed last week. Bank of America says the lack of an effective policy response to control the spread of the virus will push 2020 global growth to a contraction of 2.7 percent, instead of an expansion of 0.3 percent.
...
https://bit.ly/2URySqN
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