Fun

Bitcoin price shows strength as investors anticipate return of money printing

News Feed - 2024-05-14 03:05:29

Marcel Pechman5 hours agoBitcoin price shows strength as investors anticipate return of money printingBitcoin rallies as central bank stimulus packages become more common, and the Fed’s signal of “higher for longer” interest rates aligns with investors’ market view.5512 Total views286 Total sharesListen to article 0:00Market AnalysisOwn this piece of crypto historyCollect this article as NFTJoin us on social networksBitcoin (BTC) rose by 2% in the last 24-hours, recovering after two days of difficulty in surpassing the $61,500 resistance. By sustaining price levels above $62,500, the current upside movement demonstrates that Bitcoin can still experience positive price fluctuations regardless of the U.S. spot Bitcoin exchange-traded fund (ETF) flows, which saw $100 million in net outflows over four days.U.S. spot Bitcoin ETF daily flows, USD million. Source: Farside Investors


Several factors have improved sentiment toward cryptocurrencies, beginning with China"s announcement of issuing $138 million in long-term bonds to boost the economy. Although this was expected since the announcement in March, it reaffirmed that governments are acknowledging increased risks of recession. This was in response to data indicating that China"s aggregate credit decreased in April for the first time in seven years.


Zou Wang, an investment director at Shanghai Anfang Private Fund Management, told Reuters that the market now anticipates further liquidity injections from China"s central bank, possibly including cuts to interest rates. Such actions would exacerbate issues stemming from recent expansive measures by the U.S. Federal Reserve (Fed), which led to an increase in the U.S. monetary supply in March for the first time in two years.U.S. M1 monetary base, USD. Source: Fed Saint Louis


At first glance, injecting more money into the economy seems beneficial, but it can lead to higher inflation over time, especially as companies and individuals might delay spending and investment. As fixed-income investors begin to recognize that their returns are barely keeping pace with rising inflation, scarce assets like Bitcoin could become more attractive.


Ultimately, investors are likely preparing for a continuous trend where governments will need to keep providing liquidity to forestall economic crises. While some might argue that the stock market would primarily benefit from this added liquidity, high interest rates adversely affect companies by raising their capital costs. Any debt issued in the past 16 years will encounter significantly higher rates upon refinancing.


Last week, Fed officials hinted that interest rates might stay elevated for an extended period, according to Yahoo Finance. Minneapolis Fed Chair Neel Kashkari notably stated, "I think it’s much more likely we would just sit here for longer than we expect,” and Chicago Fed Chair Austan Goolsbee remarked, "I think now we wait." This strategy, while seemingly contradicting the push for increased liquidity, is carefully designed to delay inflationary pressures.


In essence, the U.S. central bank"s actions are intended to encourage more borrowing by companies and individuals to support employment and consumer markets. However, what the Fed cannot foresee is how much of this borrowed money will be spent on scarce assets to hedge against inflation, rather than stimulating the economy. It appears too early to fully evaluate such risks, but Bitcoin investors are skeptical about the Fed’s chances of achieving a soft landing.


Related:Japanese listed firm adds Bitcoin as reserve asset with 117 BTC


Additionally, Bitcoin"s value was influenced on May 13 by an unexpected factor: the return of social media influencer "Roaring Kitty," a former marketer who played a pivotal role in the GameStop (GME) stock rally in 2021. Having been inactive on the X social network for nearly three years, the Bitcoin community appears hopeful for some form of remarkable influence from this personality.


Cryptocurrency investors anticipate a positive shift in sentiment toward digital assets, fueled by a growing distrust in banks and traditional finance, especially in light of recent government bailouts, including the rescue of Philadelphia-based Republic First Bank. These investors believe that these developments may drive more participants toward cryptocurrencies.


This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.# Bitcoin# Cryptocurrencies# Federal Reserve# China# Bitcoin Price# Bankruptcy# Markets# Inflation# Market AnalysisAdd reaction

News Feed

Turner Wright7 hours agoRipple ruling and crypto ETFs ‘drove a lot of urgency’ among lawmakers, reportedly says Coinbase CEOCoinbase CEO Brian Armstrong reportedly said Representatives Maxine Waters and Patrick McHen
Bitcoin dominance hits 58% amid altcoin, stock market bloodbath
Tom Mitchelhill3 hours agoBitcoin dominance hits 58% amid altcoin, stock market bloodbathBitcoin dominance has notched a new yearly high amid a brutal Ethereum-led sell-off.6457 Total views10 Total sharesListen to articl
Top Crypto Assets For Q1 2025: Grayscale Reveals The Best Altcoins
Este artículo también está disponible en español. Grayscale Investments has published its quarterly review, unveiling its top 20 crypto assets for Q1 2025. Each quarter,
Bitcoin Price Crash Incoming? Why A Fall To $63,000 Is Possible If This Resistance Holds
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Ukraine Adds Dogecoin to List of Accepted Cryptos, Prime Minister Asks DOGE Co-Founder and Elon Musk to Donate
Ukraine Adds Dogecoin to List of Accepted Cryptos, Prime Minister Asks DOGE Co-Founder and Elon Musk to Donate According to a Twitter announcement stemming from Ukraine’s vi
Reddit Reportedly Testing NFT Profile Pic Functionality
Reddit Reportedly Testing NFT Profile Pic Functionality Reddit, one of the largest micro-posting sites on the internet, is reportedly venturing further into the world of non-fungib
BREAKING: Terraform to pay $4.47B to resolve SEC civil lawsuit
Vince Quill6 hours agoBREAKING: Terraform to pay $4.47B to resolve SEC civil lawsuitThe settlement would resolve a civil lawsuit filed by the Securities and Exchange Commission following Terraform’s collapse in 2022.10
UK Regulator Bans Floki Inu Ad for Being Irresponsible, Exploiting Investor FOMO
UK Regulator Bans Floki Inu Ad for Being Irresponsible, Exploiting Investor FOMO The U.K.’s advertising authority has banned an ad for cryptocurrency floki inu (FLOKI). The
UK Regulator Warns Crypto Exchange FTX Is Providing Services Without Authorization
UK Regulator Warns Crypto Exchange FTX Is Providing Services Without Authorization Britain’s top financial regulator, the Financial Conduct Authority (FCA), has issued a war
Survey: There Is ‘Significant Room’ for the NFT Market to Grow Despite Widespread Lack of Knowledge Among People
Survey: There Is "Significant Room" for the NFT Market to Grow Despite Widespread Lack of Knowledge Among People A survey about non-fungible token (NFT) trends o
Paraguayan Bitcoin Mining Companies Hurt by Power Rate Hikes of Over 50%
Paraguayan Bitcoin Mining Companies Hurt by Power Rate Hikes of Over 50% Paraguayan mining companies are taking a hit to their profitability due to the steep power fee hikes the go
FET Turning The Tide: Price Climbs Steady After A Rebound At $0.452
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu