Bitcoin Increase To $9.2K: Fed’s Policy Pushed The Crypto Up
The breakthrough, which was vigorously discussed in the crypto space over the past week, has finally come true: the price of Bitcoin increased by 4.98% and reached $9,233. This is the highest point in the last 7 weeks, starting from the Bitcoin collapse in March.
The driver for the current Bitcoin rally was the policy of the Federal Reserve System, aimed at unit stimulating the country’s economy.
The United States has not been able to stop the spread of COVID-19 for a month and remains the leader in the world in the number of victims. Fed forecasts are disappointing: under the pressure of a pandemic, stopping the former lifestyle, and blocking states, the US expects an economic crisis.
Fed ready to keep US economy afloat
Fed Chairman Jerome Powell said that hard times began for the US economy, but the government is ready to take all possible measures to rehabilitate it. In a situation where the number of victims of the pandemic does not fall, many enterprises and industries have stopped and unemployment is growing steadily. The decisive steps of the White House can become a lifeline for the whole country. Jerome Powell noted:
“To restore the US economy, the Fed will act forcefully, actively, and aggressively. ”
In particular, to reduce the financial burden on citizens, the Central Bank established a loyal interest rate on loans – from 0 to 0.25%. The main government bank also committed to not raise interest rates until the US economy stabilizes.
What stimulated more Bitcoin Bull Run: Fed’s policy or upcoming halving?
Regular stimulus packages taken by the Fed played in favor of both the traditional and cryptocurrency markets. In the past few days, steady growth has been recorded in the stock and gold markets. That is why investors began to redistribute their capital more actively.
Many cryptanalysts believe that a Bitcoin break above $9,000 was provoked not so much by the Fed’s policy, but by the long-awaited halving, which will occur on May 12. As a result, both Bitcoin mining and the reward of miners will be halved. Some crypto activists believe that after this there will be a redistribution of roles in the cryptocurrency market and Bitcoin will enter a real bull phase. Crypto analyst Tyler Durden commented:
“Thanks to halving, Bitcoin will finally reduce the share of miners from China. This will allow the cryptocurrency market to become more liquid and enter a mature phase of bullish growth. ”
Thus, while the Fed is printing “helicopter money” to support the US economy, in May Bitcoin will go the opposite way, as a result of which the daily crypto mining will be halved.