Bitcoin’s fundamental case continues to strengthen as developments regarding the next stimulus bill continue. Industry executives believe that this could act as a catalyst for this market moving forward.
This comes as BTC has begun to inch higher after weeks of consolidation. As of this article’s writing, Bitcoin trades for $9,500 — the highest price in weeks.
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How the Federal Reserve Could Boost Bitcoin Higher
Despite attempts to reopen society, the U.S. is far from a state of stability when it comes to the economy.
In comments made earlier this year, officials of the Federal Reserve and international economic authorities predicted a harrowing decline in the economy. The Federal Reserve has forecasted the worst modern economic shock while the Bank of England is expecting the worst recession in over 400 years.
Bitcoin does not seem to be in a state to benefit from this trend. Yet according to Tyler Winklevoss, chief executive of Gemini, this is not the case. In a tweet on July 22nd, he said that the “Fed continues to set the stage for bitcoin’s next bull run.”
The Fed continues to set the stage for bitcoin's next bull run. https://t.co/L5RKVHwCje
— Tyler Winklevoss (@tylerwinklevoss) July 22, 2020
Attached to this tweet was an article from the New York Times entitled “Fed Deliberates How and When to Roll Out More Economic Support.”
The article discusses impending “deliberations” between top officials at the central bank over the next round of stimulus:
“Deliberations at their July 28-29 meeting could determine how soon officials can finalize any plans, which would be unveiled either at their September meeting or later this fall, according to interviews and public statements.”
In discussing this, Winklevoss is referencing how an increased amount of fiat should theoretically lead investors to scarce assets.
Unfortunately for Bitcoin bulls, the Federal Reserve does seem hesitant to move forward with more stimulus. In comments made earlier this year, Fed chairman Jerome Powell asserted the central bank’s policy rate will not go negative. Commentators also argued that the central bank “ran out of ammo” due to its buying of corporate bonds.
Monetary Stimulus Is an Optimal Macro Backdrop
Winklevoss is not the only pundit to have co-opted the next stimulus wave as a reason to grow bullish on Bitcoin.
Paul Tudor Jones revealed in May that he is fond of Bitcoin due to central banks enacting “unorthodox” monetary policy. Tudor Jones is a hedge fund manager widely regarded to be a leading macro investor.
In a similar manner, Kyle Bass of Hayman Capital Management said earlier this week that Bitcoin is set to explode higher. Bass attributed his sentiment to “money printing.”
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Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Gemini CEO on How the Federal Reserve Will Boost Bitcoin's Next Bull Run