Fed plans to print 50 Bitcoin networks’ worth of dollars to combat the economic effects of Coronavirus
The Federal Reserve (Fed) plans to print 50 Bitcoin Networks’ worth of dollars. According to them, this is the best way to combat the economic effects of the coronavirus is by throwing money at the problem.
Federal Reserve to print $ 6 trillion
After several days of discussion between the two sides, an initial $ 2 million agreement was finally reached. This is a “bipartisan agreement on a historic relief package for this pandemic,” Senate Majority Leader Mitch McConnell said. But that’s just the start. The Federal Reserve has pledged to print as much as $ 6TN and there could even be more to come.
According to the figures from the National Review, they sated:
“Of the total, $ 4 trillion will come in the form of liquidity from the Federal Reserve, while the remaining $ 2 trillion will be part of proposed phase-three legislation from Congress. If the total assistance does reach $ 6 trillion, that would equal about 30 percent of US GDP.”
There is no comment on the adverse effects of inflating the dollar supply. We will be able to track the collapse of the monetary system once we emerge from the ashes of this crisis.
However, cypherpunk and core Bitcoin dev Jameson Lopp put the mass printing into some helpful perspective. Creating 6TN new dollars equates to nearly 50 Bitcoins worth of dollars out of thin air.
Perspective: the United States just announced the creation of nearly 50 Bitcoins worth of dollars out of thin air. Not 50 BTC, but 50 Bitcoin networks.
— Jameson Lopp (@lopp) March 25, 2020
Besides the fact that Bitcoin’s hard supply cannot be inflated and its holders will never suffer the massive depreciation of Bitcoin, it also emphasizes how small the Bitcoin network is.
After all, if the U.S. Federal Reserve could just print $ 6TN out of nowhere, Bitcoin’s market cap of less than $ 120 billion is still just a drop in the ocean. We still have a long way to go before Bitcoin reaches its massive usage. But with the vast helicopter money raining from the skies, some people seem to be waking up at last. They are quite wondering where all this free money is coming from – and what the ultimate cost will be.
Bitcoin rejected near $ 7,000 despite U.S. fiscal agreement on $ 2T stimulus package
At press time, Bitcoin was priced at $ 6,681 after failing to conquer the $ 7,000 threshold. Prices after rising from 5,700 to $ 6,700 in the last two days seem to have faced a tough challenge.
Chris Thomas, head of digital assets at Swissquote Bank, stated:
“The U.S. government’s cash payments will flow directly into people’s pockets. Naturally, some people will buy bitcoin, but far fewer people than others are predicting.”
Thomas added that fresh money has already entered the market over the last ten days, and fiscal stimulus is potentially to have a significant impact on bitcoin in the short term. An indicator called the “hodler net position change,” tracked by data firm Glassnode, does suggest that Investors accumulated coins at under $ 5,000 earlier this month.
Bitcoin is trapped in an ascending channel A break below the lower end of the channel, currently at $ 6,250, would imply an end of the corrective bounce from recent lows under $ 4,000 and could yield a re-test of support at $ 5,686 (March 23 low). So, $ 6,250 is the level to defend for the bulls.
- EOS Co-Founder: Bitcoin Price Is On Path Toward $250,000 No Matter What Happens In The Traditional Markets
- Vitalik Buterin Wants To Launch BTC-ETH Swap Proposal Floated To Benefit For Ethereum But New Lows Are Coming?