The Federal Reserve stated on Dec. 11 that they have decided to leave interest rates unchanged for now with 13 out of 17 members voted to keep rates the same, and announced that there will be no rate-cutting plans in 2020. Even though President Trump has repeatedly pushed the Fed to cut rates, but the central bank says the U.S. economy is in a good place and does not need an extra boost.
Economists say the Fed’s actions kept the economy on track despite headwinds from weak global growth and Trump’s trade war.
According to Bloomberg’s recent post, a detailed report of what the world’s central banks would do in 2020. The report covered a lot of subjects, including both pessimistic and optimistic matters. 2020 considers being a major year for Bitcoin and the cryptocurrency market.
As 2019 almost comes to an end and we head into the next decade, many people in the cryptocurrency market are hoping for the future prospects of Bitcoin. 2020 is set to be a big year for the market for several reasons.
Multiple pilots have been planned to be launched. While the market has already seen some of them which most of them prefer technology to crypto. They are exciting developments for a market that is on the verge of applying commercial applications.
Investment in the space and discovery of blockchain-based solutions has also been emerging quickly and a number of financial entities have warmed up to cryptocurrencies.
Maybe the central banks have interests in working with blockchain-based currencies or digital currencies is the biggest indicator of this growth.
Central Banks release its own cryptocurrency
There have been several reports in the past few weeks that have discussed the topics of central banks releasing their own cryptocurrencies. For example, Sweden’s central bank has decided to release its own e-Krona, China has just announced trials for its CBDC e-yuan, and Uruguay began a test to issue digital Uruguayan pesos. These efforts of creating its own Cryptocurrency somewhat come from the launching of Facebook’s Libra currency.
Even though there are certainly some adoptions of new technology, but for the most part, it comes from older economic models, not the decentralized kind.
Bloomberg’s report reviews how interest rates, mostly low all-inclusive, could cause a serious threat to the global economy. Therefore, negative interests and quantitative relieving are reasons why cryptocurrency promoters head towards digital currencies.
What makes investors change to the crypto market?
Negative interest rates and quantitative easing are two major factors led investors and experts to worry about them. A German bank experienced negative interest rates earlier this year that really cost the account holder money for him/her to store funds. Quantitative easing is just pumping more money directly into the economy.
These have made investors feel worried about the stability of the global economy, so they change to the cryptocurrency market as a hedge against traditional markets.
Read more: