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US Turmoil and Negative Interest Rates – Billionaire Michael Novogratz Says ‘Watch Gold and Bitcoin’

02/06/2020 by Idelto Editor

For the first time since October 2019, Federal Reserve Chair Jerome Powell admitted to leveraging quantitative easing (QE) tactics. Powell explained on Friday, the central bank is now comfortable with leveraging QE on a regular basis. Furthermore, the Fed is planning on utilizing negative interest rates in the near future, according to a number of economists and analysts. The economic turmoil in the U.S., and abroad is causing a number of well known investors like Michael Novogratz to focus on bitcoin and gold.

Fed is ‘Comfortable’ With Regularly Invoking QE and Negative Rates in the US

The global economy has been shuddering and the U.S. economic system has been falling a lot harder than most. American debt relative to gross domestic product (GDP), jumped to 55% during the end of 2000 and twenty years later it is now 110%. The Federal Reserve has also created trillions of dollars on a whim, due to unprecedented panic sparked by the coronavirus outbreak.

The Fed balance has been jacked up to the tune of $6.9 trillion to date, as the central bank has expanded its powers beyond comprehension. In addition to all the dollars passed between the Fed and numerous financial incumbents, the central bank also chopped the benchmark interest rate to zero. If the Fed drops the interest rate below zero, to the negative zones, economists and market strategists think it will fuel the value of digital currencies like bitcoin and precious metals like gold.

Gold and Bitcoin

A recent report from the financial incumbent, Standard Chartered says that if the Fed starts to implement negative interest rates it will do so in a unique method. Meaning, it would likely go for a big “hail mary” and drop the benchmark rate to -0.5% to -1% fast. Standard Chartered’s report reveals that if the Fed does drop the rate below zero, then gold will jump to spectacular heights immediately after.

The bank thinks that the price per ounce of gold will skyrocket from today’s $1,700+ range, to a high of “$1,920 if Fed turns negative on rates.” Standard Chartered’s report doesn’t mention bitcoin, but the financial entity is very into blockchain technology concepts. Max Bronstein of Coinbase explained on Twitter, in response to a blog post written by former Fed chair Ben Bernanke, that the Fed may try to stave off lowering the benchmark rate below zero by creating more inflation.

“If you’re wondering how the Fed is going to try and stave off negative interest rates, here’s a potential preview, authored by Ben Bernanke himself,” Bronstein said. “The inflation target is going higher, expect another wave of debt monetization.” Moreover, Tesla founder Elon Musk believes the same and explained to the famous Harry Potter novelist, J.K. Rowling, that the Fed’s inflation problem makes the perfect case for bitcoin. Musk said:

Massive currency issuance by government central banks is making Bitcoin Internet money look solid by comparison.

Michael Novogratz: ‘When $10k Bitcoin Goes, It Will Move Fast – Get on the Train’

Despite people’s opinions that a wave of debt monetization may keep the interest rate from falling, Standard Chartered explained that the market may be convinced the Fed will leverage negative rates in the near future.

“Markets saw the Fed funds dipping briefly and very gently (1-2bps) into negative territory in mid-2021 before returning to positive territory (4-7bps) in mid-late 2022. We see this small move into negative rates as reflecting a strong market belief that the Fed will be on hold for an extended period. If the market is convinced that there is no room to raise rates, it will likely price in some probability of rates falling, however remote,” Standard Chartered said in the firm’s recent report.

The prominent Wall Street investor and Galaxy Digital founder, Michael Novogratz explained that because of the “turmoil in the USA” people should watch bitcoin and gold. “Watch Gold vs Bitcoin,” Novogratz tweeted. “If that chart breaks higher it will turbo boost Bitcoin.” Novogratz further added:

Bitcoin is coiling. It will take out $10k soon. All the tragic turmoil in the USA adds to the narrative. Budgets are going one way and it’s the opposite of balanced. When $10k goes it will move fast. Get on the train.

Bitcoin (BTC) touched a high of $10,280 on June 1, 2020, as the American nation has been dealing with mass riots and protests. Since then the cryptocurrency is battling heavy resistance and the price is hovering just above the $10k zone at the time of publication.

What do you think about gold and bitcoin prospering from the economic meltdown? Let us know in the comments below.

The post US Turmoil and Negative Interest Rates – Billionaire Michael Novogratz Says ‘Watch Gold and Bitcoin’ appeared first on Bitcoin News.

Covid-19 Economy Fuels Faith in Crypto: Trust In Bitcoin Over Banks Increased 3X Since 2017

19/05/2020 by Idelto Editor

The market research organization, The Tokenist, recently published a report called “Comparing Public Bitcoin Adoption Rates in 2020 vs 2017.” The study’s findings give a comprehensive look at the cryptocurrency ecosystem between 2017 and now. The researchers’ survey shows that since the post-Covid-19 economy is setting in, trust in bitcoin has grown 29% in the past three years.

Faith In Traditional Banks and Financial Incumbents Is Waning

A recently published study from the crypto think tank, The Tokenist, details that there is a growing trust in bitcoin over traditional investments like gold, stocks, and real estate. The market researchers leveraged a survey that was taken in April 2020 (5,421 participants in 24 countries) and collated several surveys from 2017 as well. The Tokenist utilized these polls to see how attitudes and perceptions have changed since the price fluctuations and the impact of Covid-19.

“Faith in large financial institutions has been steadily waning for more than a decade and the COVID-19 pandemic has only accelerated this process,” the report highlights. “Bitcoin, itself developed in the years after the 2008 market crash as an alternative to traditional assets, stands to be a major beneficiary of this trend.”

47% of the Poll’s Respondents Trust Bitcoin Over Big Banks

The Tokenist also leveraged surveys from the company’s mailing list and another that saw 4,852 participants in 17 countries. According to the study’s findings, The Tokenist researchers have found that there is a trend of individuals with “positive sentiment regarding BTC as a long term store of value.”

The findings note that over 45% of respondents preferred Bitcoin rather than stocks, real estate, and gold, and “61% of the total respondents (and 78% of millennials) are now somewhat familiar with BTC, and 14% of millennials have owned the asset.” The report continued:

47% of respondents trust Bitcoin over big banks, an increase of 29% in the past three years. 43% of respondents, and 59% of millennials, feel that most people will be using Bitcoin within the next decade. In 2020, 44% of millennials report that they are likely to buy BTC in the next five years. More than one in three millennials would hold onto Bitcoin they are given, while a slightly smaller number (27%) would immediately sell it. 39% of male millennials now have no problem with the intangible nature of BTC, and a quarter of millennials as a whole report the same attitude.

The report finds that the attitude toward BTC, in general, is more positive and optimism has increased by 27% during the last three years. “60% of respondents felt that Bitcoin is a positive innovation in financial technology,” The Tokenist’s report concludes. “Increased familiarity with Bitcoin has convinced many that it is a positive force,” the paper’s authors added.

What do you think about The Tokenist’s researchers’ surveys and findings? Let us know in the comments below.

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JPMorgan, Bank of America, Wells Fargo Sued Over Trump’s Paycheck Protection Program

22/04/2020 by Idelto Editor

Class action lawsuits have been filed against JPMorgan Chase, Bank of America, Wells Fargo, and U.S. Bank for their alleged unlawful and fraudulent practices in the Paycheck Protection Program. This program is part of President Trump’s $2.2 trillion stimulus package to help small businesses cope with the economic crisis resulting from the covid-19 pandemic.

Lawsuits Against Big Banks

Four class action lawsuits were filed Sunday in the U.S. District Court for the Central District of California against some of the largest banks in the country: JPMorgan Chase Bank, Bank of America, U.S. Bancorp and U.S. Bank, and Wells Fargo Bank.

The suits allege that banks violated the California Business & Profession Code with unfair, fraudulent, and unlawful practices as well as false advertising and fraudulent concealment in dispensing loans from President Trump’s Paycheck Protection Program (PPP). The loans were intended to provide American small businesses suffering from the covid-19 crisis with eight weeks of cash-flow assistance. It is part of the government’s $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act.

However, banks allegedly prioritized large loans in order to earn larger fees, effectively shutting out small businesses from accessing the funds. The suits, filed by Stalwart Law Group on behalf of small business owners, read:

[The bank] has, once again, prioritized corporate greed at the expense of its small business customers.

Cheating the Federal Stimulus Program, Prioritizing Loans With Larger Fees

Citing data provided by the Small Business Administration (SBA), the lawsuits allege that JPMorgan Chase, Bank of America, Wells Fargo, and U.S. Bancorp failed to process the PPP applications on a first-come, first-serve basis as required by the program. Instead, they “prioritized loan applications seeking higher loan amounts because processing those applications first generated larger loan origination fees for the banks.” The PPP loans are administered by the SBA and processed by banks.

The plaintiffs claim that the banks encouraged them to “act fast” and apply for the loans, concealing from the public that they were “reshuffling the PPP applications” they received “and prioritizing the applications that would make the bank the most money.” As a result of their “dishonest and deplorable behavior,” the suits describe, “thousands of small businesses that were entitled to loans under the PPP were left with nothing.”

The lawsuit documents further explain that under the Paycheck Protection Program, banks are entitled to receive origination fees on loans they process. The fees are 5% for loans of up to $350,000, 3% for loans between $350,000 and $2 million, and 1% for loans between $2 million and $10 million. Banks could, therefore, earn up to $100,000 for processing loans between $2 million and $10 million compared to only a maximum of $17,500 for loans of up to $350,000.

Many people have criticized the fact that large corporations have snatched up funding meant for small businesses. President Trump said that any companies that should not have received the funds will have to give the money back. At least one company, burger chain Shake Shack, has said it will return the $10 million received from the PPP.

Meanwhile, in order to further assist small businesses across the country, the Trump Administration is in the process of delivering another stimulus package. On Tuesday, the Senate passed a new $484 billion relief bill to replenish small business loans as well as fund hospitals and testings.

What do you think about these lawsuits? Let us know in the comments section below.

The post JPMorgan, Bank of America, Wells Fargo Sued Over Trump’s Paycheck Protection Program appeared first on Bitcoin News.

Americans Purchase $1,200 Worth of Bitcoin, While 7 Banks Fumble With Stimulus Payments

20/04/2020 by Idelto Editor

For years now, bitcoiners and cryptocurrency proponents have said the antiquated banking system will not continue to survive for very long and the financial system is showing massive cracks these days. The recent stimulus check fiasco is a prime example of the issue, as customers from PNC, JPMorgan Chase, US Bank, and Capital One have been complaining about technical issues. Moreover, circumstantial evidence shows that a decent number of people who got their stimulus money have spent the funds on cryptocurrencies.

The Antiquated Banking System Struggles With People’s Stimulus Payments

During the last week and a half, Americans have either been talking about getting their $1,200 stimulus checks or complaining about issues with the banking system. There’s been a slew of headlines explaining how a multitude of American mega-banks are floundering trying to process stimulus money. Reports note that banks like Capital One, US Bank, JPMorgan Chase, Bank of America, PNC, and even Paypal customers have been dealing with problems. Four days ago, news.Bitcoin.com reported on how the podcaster Tim Pool asked his 446,000 Twitter followers if they were having banking issues and many told him they were having issues for 1-2 days.

Reports this week note that the technological backbone of the banking system is struggling immensely. The Washington Post (WP) reports that many financial institutions are relying on software that is decades old. Moreover, a myriad of banking institutions didn’t keep their infrastructure adequately staffed, even though they made record profits in 2019. The WP columnists stressed that if the antiquated banking system continues to have major issues, citizens won’t be “able to pay bills or buy groceries and further exacerbate the economic decline.”

According to the U.S. government, over 80 million stimulus payments were sent out this week. Paypal customers have also been upset with the company, as a number of people have been locked out of the Paypal system for no apparent reason. One person on Reddit explained how during the global lockdown, Paypal decided to lock his account that held a $3,000 balance for 180 days.

“In a time where the majority of the population is struggling with money, these thieves are able to lock funds just like this, potentially leaving people without anything,” noted a Paypal customer on Sunday. “The funds came in my company’s fully verified account from 1 transaction of a single client, with a regular invoice, contract and VAT ID. No fraud or any other illegal bs like they’re trying to say. I’ve been so relieved and happy to have the majority of my savings in bitcoin,” he added.

Exchanges Notice $1,200 Stimulus Checks Are Being Deposited to Purchase Crypto Assets

Further, people have been speculating that some Americans are spending their stimulus checks on cryptocurrencies. Coinbase CEO Brian Armstrong tweeted on April 16 a chart that showed a spike in $1,200 deposits on the San Francisco-based exchange. The financial columnist Paddy Baker explained that a representative from, Binance US also noted that people have been depositing $1,200 increments. “People do seem to have deposited exactly $1,200 into Binance US in the past couple of days,” the Binance spokesperson said. Statistics from Crypto Compare also show that USD pairings with top digital currencies like BTC and BCH have seen an exponential increase in daily swaps.

🤔 pic.twitter.com/uhz7Od3skX

— Brian Armstrong (@brian_armstrong) April 16, 2020

A slew of cryptocurrency proponents continue to wonder what it would be like if a bunch of Americans used their stimulus money for purchasing digital assets. There have been a number of studies done on the “stimulus dollar value ratio” (SDVR), “pre-stimulus dollar value” (PDV), and the “Post-stimulus dollar value (ODV)” effects on the crypto economy. So far the market value of all 5,000 crypto assets in existence has been hovering around $190-210 billion during the last seven days. Even though the covid-19 economy has been rough, digital currencies have managed to fend off most of the economic downturn.

What do you think about the issues with banks processing stimulus checks? Let us know what you think in the comments below.

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80 Banks Charge Negative Interest Rates as Crisis Deepens in Germany

12/04/2020 by Idelto Editor

Amid the coronavirus pandemic and deepening financial crisis, the number of banks charging customers negative interest rates in Germany has accelerated. At least 80 banks now reportedly charge negative interest rates, 16 of which apply this policy to even small deposits.

Also read: IMF Declares Global Recession, 80 Countries Request Help, Trillions of Dollars Needed

Increasing Number of Banks Charging Negative Interest Rates in Germany

The Germany banking sector is facing a tough time as the number of covid-19 cases continues to surge. New data released by the European Central Bank (ECB) last week shows that banks in the eurozone were already suffering from declining profitability even before the coronavirus crisis, with German banks being the least profitable.

Throughout it all, banks in Germany are increasingly charging customers negative interest rates. According to consumer product comparison portal Verivox, 80 banks have published negative interest rate policies on their websites or price lists. This represents a significant increase from the 41 banks that were charging negative interest rates in February, as news.Bitcoin.com reported. Verivox Managing Director Oliver Maier commented:

In the coronavirus crisis, the trend towards negative interest rates accelerated noticeably.

List of 80 banks in Germany that are charging negative interest rates, according to consumer product comparison portal Verivox.

In addition, the media has reported that 22 other banks in Germany have announced that they are charging some customers negative interest rates but have not published their policies online, Verivox detailed.

By examining about 800 banks in Germany, the comparison portal found that most of the 80 banks that are charging negative interest rates do so to large accounts, but 16 of them also apply the negative rate policy to deposits below 100,000 euros ($109,295). This number has doubled from February when only seven banks applied negative rates to small accounts. Different banks have different policies on what specifically they are charging, which are often shown in their account terms and conditions.

ECB Negative Rate Policy and Banks Charging New Customers

The ECB has held its main deposit rate at a historic low of -0.5%. The European Central Bank rolled out negative rates in 2014 for 19 countries in the eurozone to boost business and consumer lending in an effort to spur economic growth. However, the policy has dragged on, forcing some banks to pass on the burden of negative interest rates to their customers.

Banks in Germany cannot charge negative interest rates to existing customers without their expressed consent due to a court ruling. However, they can charge new customers.

Due to a court ruling in June 2018, banks in Germany can only apply negative interest rates to new customers, not existing ones. The court case involved Volksbank Reutlingen, a bank in the southwestern state of Baden-Württemberg, which sought to impose a -0.5% interest on existing checking and many savings accounts exceeding €10,000, alongside normal fees.

Since the bank did not provide any additional service in exchange for the penalty rate, the judge ruled that the double pricing of an identical service unreasonably disadvantages customers and is therefore inadmissible. However, the ruling only applied to existing accounts, so banks can apply negative rate policies to new accounts.

What do you think about 80 banks in Germany charging negative interest rates? Let us know in the comments section below.

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