The Bitcoin price index went past the $6000 figure in the early hours of Monday as the US government unveiled one of the biggest financial stimulus packages in decades to help off the immense economic threat posed by the deadly Coronavirus pandemic in the country.
The move by the US government comes in the backdrop of the reduction of interest rates by the Federal Reserve Bank, the central bank of the USA. The Federal Reserve bank in addition to the considerable lowering of the interest rate also announced $1.5 trillion in liquidity injection to help the markets and the corporate sector.
Bitcoin in recent weeks has faced several ups and downs due to the uncertainty clouding the future of the world. There is constant disagreement on the status of Bitcoin itself with HODLers consider Bitcoin to be a storage of value like Gold while other short-term traders consider it a volatile short-term asset just like other monetary investments. It was due to the actions of the latter that Bitcoin fell more than 50% on March 12 and resulted in a bleak future for the sector. To investors’ astonishment, Gold and other conventional safe havens also weakened further instead of gaining against the dollar.
Some analysts predicted that US Dollar had become the next haven. This could have spelled further doom for the crypto sector but luckily the Bitcoin price index first stabilized and is now slightly trending upwards as predicted by cryptounit.com earlier yesterday. The sector managed to give a relatively good performance without resorting to bailout packages from the government, over performing many top stocks in the process. The sector particularly laughed off speculation from US congressmen that they were going to print two $1 trillion platinum coins to distribute among the people.
The move was made fun of the by crypto community and many have clung on to their long-term positions due to this event. These trillions of dollars worth of increasing liquidity may slow down the eventual economic crisis but it is in all certainty likely to bring the world closer to a tougher economic recession, bigger than the last one back in 2008.
With the latest gains posted by the cryptocurrency market, the outlook has remained stable for now. The Bitcoin price index, however is looking at several key price resistances in the future that it needs to overcome to revive the long-term bull market.
Image source: pixabay.com
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