stimulus

Financial Bazookas Revealed – Market Strategists Believe the Fed Will Purchase Stocks Soon

01/04/2020 by Idelto Editor

Bitcoin and cryptocurrencies may be the only free-market assets left not manipulated by central banks like the U.S. Federal Reserve. Since the covid-19 outbreak, the Fed has unleashed a massive arsenal of monetary weapons to combat the effects on the economy. After the significant rate cuts, quantitative easing (QE), and buying mortgage-backed securities, analysts believe the Fed could start purchasing stocks in order to quell the economy.

Also read: US Mortgage Industry Could Collapse as Housing Crisis Looms, Experts Say

The Fed Is Deploying More Than Just a Monetary Policy Bazooka, It’s Unleashing the Whole Arsenal

On Tuesday, the U.S. Federal Reserve threw another tool into the financial system by announcing an international repo option in order to curb investors from panic-selling Treasuries. Since the covid-19 outbreak started spreading rapidly throughout the nation, the economy has been hit hard by numerous industry shutdowns across the U.S. After closing borders and shutting down major U.S. industries, the Fed has tried to save the American economy by using a variety of monetary schemes. The Fed has introduced rate cuts, quantitative easing (QE), foreign currency swap lines, discount windows, a Commercial Paper Funding Facility (CPFF), a Term Asset-Backed Securities Loan Facility (TALF), and a Secondary Market Corporate Credit Facility (SMCCF). The aforementioned list just scratches the surface when it comes to the newly introduced schemes the Fed has initiated since the covid-19 outbreak.

Fed Chair Jerome Powell and the bank’s board of directors have unleashed the big guns citing the covid-19 outbreak as the primary reason to throw unlimited amounts of money at private banks. The Federal Reserve said on March 26 that the central bank recognizes that small financial institutions may need additional time to submit “certain regulatory reports in light of staffing priorities and disruptions caused by the Coronavirus Disease 2019 (covid-19).” In order to give Wall Street some leniency, the Fed “will not take action against a financial institution with $5 billion or less in total assets for submitting its March 31, 2020.”

The Fed also invoked a Money Market Mutual Fund Liquidity Facility (MMFLF) and bought $185 billion in mortgage-backed securities. However, all these moves have not helped stock and commodity markets and the mortgage-backed securities purchase threatened the U.S. real estate market. After the Fed bought the mortgage securities it caused a massive margin call and put hundreds of lenders at risk and without capital.

To those of you wondering what the US stock market will do on any given day, just remember, the Fed has unlimited purchasing power to buy it all up. They have 100 percent full control over stocks and they will do whatever they please with it. Goodbye price discovery. The end.

— Heidi (@blockchainchick) March 26, 2020

Despite the adverse effects on the housing market, the Fed is still attempting to insulate the American economy with the central bank’s parlor tricks. The Fed’s new international repo is an unprecedented move by the central bank, as it will provide foreign central banks with the ability to get USD in exchange for U.S. Treasuries. In addition to the international repo, the Fed also revealed it established a temporary FIMA Repo Facility (FRF) to “help support the smooth functioning of financial markets.”

Fed has printed trillion of $ to do what?

To purchase financial assets

-They already are largest holders of real estate in the world
-Have already pushed the short term yields into negative
-They will soon buy out stocks

Don’t fall for dead cat bounce#Buyeroflastresort

— Vinay Jaiswal (@vinayjazzi) March 31, 2020

The Fed’s Next Step Could Be Purchasing Large Quantities of Stocks

Now economists and investors think the Fed’s next move will see the central bank purchasing stocks. Because the American economy is in turmoil, market analysts say that the Fed will likely use this approach soon to bolster the financial system. “If there were any major dislocations, it is clear that they will go into whatever nook and cranny in the market that starts to choke,” chief market strategist at Prudential Financial, Quincy Krosby, told the media on Sunday. The Prudential executive further stated:

We know that when you have choking in one part of the market, you have choking in another part of the market that leads to dislocation. As soon as you cross that line, you are now facing something else that you could conceivably buy.

Members of the Federal Reserve and the Shadow Open Market Committee have already discussed the possibility of the Fed buying stocks to help the economy. Boston Fed President Eric Rosengren told the committee on March 6 that he thinks the U.S. should “allow the central bank to purchase a broader range of securities or assets.”

The Perfect Storm for Digital Assets Like Bitcoin

Cryptocurrency participants believe that the current economy is the “perfect storm” for censorship-resistant and a mathematically probable financial system. Bitcoin has a lot of benefits to a society that has been having significant problems doing what they want with their own money. In the last six months alone, news.Bitcoin.com has reported on governments and banks in countries like the U.S., Egypt, Lebanon, India, and Germany limiting cash withdrawals. Cryptocurrencies like bitcoin have better properties than gold during an economic crisis, as analysts have questioned gold’s alleged ‘safe-haven’ status since the 2007-2008 financial catastrophe. It’s a well known that central banks oversaturated bullion markets during those years by using bullion-bank repos just like they do with Treasuries today.

Cryptocurrency markets did decline with everything else under the sun on March 12th, otherwise known as ‘Black Thursday.’ The decline has made people assume that BTC and other digital assets have a strong correlation with stocks and equities right now. However, historical data shows digital asset markets have always been non-correlated with stocks, commodities, and equities. A higher correlation during a black swan event (covid-19) doesn’t equate to both markets being tethered together whenever economic environments change.

As the Fed and central banks worldwide pull out every tool they have in the monetary policy toolbox, bitcoiners understand that digital assets cannot be manipulated as easily as fiat currency, property investments, precious metals, and the stock markets. If you have never read or heard about the positive benefits and economic freedom bitcoin can provide, get started today with some of our educational resources.

What do you think about the Fed possibly buying stocks next? Let us know what you think in the comments below.

The post Financial Bazookas Revealed – Market Strategists Believe the Fed Will Purchase Stocks Soon appeared first on Bitcoin News.

$2 Trillion for Surveillance Capitalism – US Government Promises $1,200 to Every American

25/03/2020 by Idelto Editor

On Wednesday, U.S. Congressional leaders had seemingly come up with a stimulus deal at around 1 a.m. EST. The package will cost upwards of $2 trillion and politicians are promising direct payments of $1,200 per American if they make $75,000 or less. The dollar injection will be the largest financial measure ever enacted by Congress in an effort to boost the faltering U.S. economy during one of its most challenging periods in history.

Also read: US Real Estate in Jeopardy – Analysts Predict Housing Market Crash to 29-Year Lows

US Lawmakers Promise $1,200 Payments to Citizens

During the last week, the U.S. has been dealing with the coronavirus outbreak and the effects on the American economy. Since the virus touched American soil, politicians have been enacting executive orders like closing borders, shutting down major U.S. industries, and ordering regular citizens to stay at home. The bureaucracy’s measures have stunted the American economy and sent shockwaves through the stock market, the real estate industry, and pushed unemployment levels through the roof. Meanwhile, for a few days now, Republicans and Democrats have hashed out a stimulus plan to help businesses and citizens deal with the financial hardships they have been facing. During the early morning hours of March 25, White House legislative affairs director Eric Ueland told the media “We have a deal.”

At 1 a.m. EST members of Congress supposedly penned a stimulus package that will cost around $2 trillion USD. U.S. politicians have promised American citizens a cut of that money and Wall Street will get some funds as well. Small- and medium-sized American businesses can expect their stimulus in the form of Federal loans of around $300 billion.

One part of the stimulus plan includes sending money to individuals and families with an adjusted gross income of $75K or less. People within this income bracket are being promised $1,200 checks based on their 2018 income tax filings. People with children will be eligible for $500 per child and singles without children who make $99K will be ineligible. Couples without children who have an adjusted gross income of $198,000 or more will also be removed from the stimulus plan.

On Tuesday, March 24, the Dow Jones Industrial Average was up 6.46% or 1,201.54, to 19,793 and the S&P 500 Index was up 5.77%, or 129.10, to 2,366.50. The Nasdaq Composite Index was up 5.38%, or 368.91, to 7,229.58 on Tuesday as well. On Wednesday, futures and the opening bell numbers indicate today’s gains are flat and the Nasdaq Composite Index is down at press time.

Meanwhile, a large sum of the cash injections will be sent to bolster the airline industry and Wall Street in order to get corporations on their feet again. Financial incumbents will get “unlimited bond-buying” and three separate credit facilities from the Fed. The Fed has already been pumping trillions into the hands of private banks but the stimulus package for small- and medium-sized American businesses will come in the form of loans. The 2020 package ostensibly will create a new “main street lending program” that will offer $300 billion in financing for smaller companies in need.

$4 trillion more to go. https://t.co/ZDIOlMz4zm

— Sven Henrich (@NorthmanTrader) March 25, 2020

‘Digital Dollars’ and ‘Surveillance Capitalism’

No one truly knows how all of this money will be dispersed especially when it comes to American citizens. Wall Street, U.S. hedge funds, and financiers have already had access to trillions during the last two weeks. Speculators believe the cash handout will cause major disruption in the U.S. by inciting class warfare and even more liquidity issues. Moreover, politicians are talking about introducing a “digital dollar” and privacy advocates are afraid the U.S. bureaucracy will kill physical cash in the near future. There is speculation about a Fed-based CBDC (central bank digital currency) or a stablecoin token similar to tether (USDT).

During the last few two decades, the concept of “surveillance capitalism” has increased a great deal according to Shoshana Zuboff’s latest novel. Free services and cash injections from governments are responsible for the creation of surveillance capitalism and many believe the covid-19 crisis is the perfect catalyst to push the idea to new levels.

Cryptocurrency advocates are not impressed by such talk as most of them understand these digital currency concepts will be nothing like the network Satoshi Nakamoto created. If a “digital dollar” is headed to a theater near you, it’s guaranteed to be privacy-invasive, crammed with KYC/AML protocols, and extremely centralized. Bitcoin, on the other hand, is the very opposite of the concepts being pushed by politicians and central bank governors. Nakamoto created a peer-to-peer electronic cash system that is permissionless by nature and was fundamentally designed to invoke economic freedom. The modern U.S. monetary system is fundamentally designed to stunt growth, pillage people’s wallets with hidden inflation, and track everyone’s financial transactions.

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The possibility of the U.S. government changing the monetary game for parasitic ends is quite probable, especially in times of crisis. For instance, Shoshana Zuboff’s latest novel “Surveillance Capitalism” describes how free services and cash injections are the perfect onramps to monitor people’s behaviors and financial transactions without consent.

“Surveillance capitalism,” she writes, “unilaterally claims human experience as free raw material for translation into behavioral data. Although some of these data are applied to service improvement, the rest are declared as a proprietary behavioral surplus, fed into advanced manufacturing processes.” Zuboff’s book further notes:

Surveillance capitalists have grown immensely wealthy from these trading operations, for many companies are willing to lay bets on our future behavior.

The $2 trillion 2020 stimulus package is still not set in stone as far as official approval is concerned. It very well could be stopped by certain leaders and nobody knows how Congress plans to execute the delivery of these funds, as settlement is still up in the air.

What do you think about the $2 trillion stimulus plan agreed upon by certain U.S. lawmakers today? Let us know in the comments section below.

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China’s Changing Perception of Bitcoin: Bitkan CEO Shares Insights After 7 Years in Crypto Industry

20/03/2020 by Idelto Editor

Since the advent of bitcoin in 2009, cryptocurrencies have gone from being a niche topic for tech nerds to ubiquitously recognized — if not always understood — staples of modern finance. Bitkan CEO Liu Yang recently took some time out to give news.Bitcoin.com a peek into the Chinese bitcoin community and its changing ideas and perceptions of crypto, throughout Bitkan’s seven years in the business. Though general narratives have changed and evolved, and the recent covid-19 crisis impacted markets, the CEO says that overall China is still bullish on bitcoin.

Also read: Tether Launches Stablecoin Token on Bitcoin Cash via Simple Ledger Protocol

Following Bitcoin, Forming Bitkan

An integrated platform for multiple crypto services, Bitkan was launched in March 2013 by former members of China tech giant Huawei‘s R&D department. CEO and co-founder Liu Yang was head of the Huawei Wireless Technology R&D department at the time, leaving to pursue business in crypto when, according to Bitkan, “most people saw Bitcoin as a Ponzi scheme.”

“Bitkan started out as a geek product,” the company told news.Bitcoin.com. “The actual time that Bitkan was created was back in December 2012. At that time, most of the major exchanges for bitcoin geek players in China were all from abroad, hence Chinese bitcoin community users need some market alerts tools to facilitate price monitoring.”

After launch in 2013, the Bitkan platform grew to be a hub for market data, and an OTC and aggregated trading platform with an active community.

Chinese Community’s Perceptions of Bitcoin Change, OTC Trading Remains Popular

According to CEO Yang, bitcoin was initially a point of general intrigue for Chinese, but soon “went from being an item of curiosity to becoming deemed a Ponzi scheme by the Chinese community.” From there, the perception evolved. Yang elaborates:

Towards the end of 2014, everyone began to focus their attention onto blockchain technology. After the ICO wave in 2017, Bitcoin was characterized as a revolutionary digital currency. After the madness at the end of 2017, people have generally heard of Bitcoin. The common man is still rather wary of cryptocurrency while some people regard Bitcoin as the best digital investment product.

When it comes to China’s legal restrictions on the crypto industry, and OTC trading in the country, Yang told news.Bitcoin.com there will always be a demand.

“I would say that there is always a demand for OTC trading. Due to restrictive legislation on exchanges, the need for OTC will continue to exist to satisfy investment and trading needs. Thus, after regulations, OTC transactions will inevitably develop more vigorously than before.” Yang makes a small caveat: “However, from the perspective of the entire crypto market, I would say that the number of users are declining as a whole. This is due to regulation and the price of bitcoin.”

Covid-19 Crisis and Ensuing Market Slump

“I think the financial crisis has arrived. In other words, we are already caught in it,” Yang asserts.

Incidentally, the financial crisis this time is not quite the same as the financial crisis of 2008. This time, as the epidemic situation worsens, many production lines and commerce have stagnated. This may cause a more significant harm to the markets.

Noting government efforts to stem some of the economic carnage, Yang details: “From China’s $7 trillion planned infrastructure spending to U.S. interest rate cuts and the $400 billion plan to boost their economy to protect their businesses, we can see that global governments will likely take steps to save the markets.”

Workers at a factory in Jiujiang, China.

He also notes that some Chinese see the covid-19 crisis and ensuing crypto market plunge demonstrating “a certain degree of correlation between bitcoin and gold” as they have not appeared to follow the S&P stock market index in more recent events.

“We can see that the [crypto] price slump this time happened after the plunge of the U.S. stock market and crude oil,” he elaborates. “Likewise, it has also led to gold to fall as well. This morning (March 19), the S&P 500 circuit breaker occurred for the fourth time this month. However, gold did not fall together with the index and neither has bitcoin.”

Yang views the recent plummet in crypto prices as “a rapid deleveraging process” which will ultimately help crypto. “In the long run, it is conducive to the long-term development of cryptocurrencies. After this plunge, the development of cryptocurrencies will be more healthy and positive.”

Despite a Rough Start to 2020, China Still Bullish on Bitcoin

Challenges of the new year notwithstanding, Yang says that “when there is a crisis there are opportunities,” and “While some older traditional businesses may fall, at the same time, new business models may arise … the epidemic in China has actually accelerated the rise of e-commerce, remote working, online education and many other industries that were not that popular before.” He also predicts good things for bitcoin’s price, detailing:

I think that this round of decline is the result of the leverage effect in the crypto market, and it needs to burst its bubble. There will still be some fluctuations, but all in all the market is likely to have a strong recovery within a year, and is very likely to exceed the previous all-time-high.

Bitkan’s goal into 2020 remains to make crypto investment easier by way of a “one-stop crypto investment platform,” the CEO notes. As for China, Yang maintains that there is a marked difference between speculators and investors, the latter typically remaining steadfast through storms while some of the former peel off in defeat, and summarizes: “Although the view of the Bitcoin community in China is still relatively fragmented, the overall voice of the community is still bullish as it is currently in a period of severe volatility.”

What is your perception of bitcoin currently, amidst the crisis? Let us know in the comments section below.

Images courtesy of Bitkan.com, Shutterstock, fuyu liu, humphery, Joinmepic, fair use.

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Scramble for Dollars: Emergency Cash Injections in $250 Trillion Global Debt Place the Fiat Ponzi On Ventilator

19/03/2020 by Idelto Editor

The last few weeks of global hysteria has shown there’s been a mad dash for dollars and various fiat currencies. Moreover, central banks have tried to quell cash liquidity issues by injecting trillions into the hands of private banks and hedge funds worldwide. As the financial system shudders with more than $250 trillion in global debt, the government’s monetary system looks more like a crumbling Ponzi scheme every day. Charles Ponzi would be proud of the world’s fiat system, as today’s monetary framework requires an endless supply of victims to sustain confidence in currencies backed by nothing.

Also read: US Cash Crisis: Withdrawal Limits Spark Bank Run Fear

Central Banks Pump Trillions Into the Hands of Financial Institutions Trying to Establish Confidence in the Fiat Ponzi Scheme

The coronavirus scare has created havoc across global markets and in response, central banks worldwide have injected trillions into the hands of private banks and corporate entities. For instance, the Federal Reserve revealed it would be funneling $500 billion per day into repo markets until Friday and the central bank started repo operations on Monday. Bank of England’s governor Andrew Bailey told the press on Wednesday that the bank was “prepared to pump unlimited money into the financial system.”

Scramble for Dollars: Emergency Cash Injections in $250 Trillion Global Debt Place the Fiat Ponzi On Ventilator — The Bank of England’s Andrew Bailey said he’s willing to pump unlimited QE into the hands of financial institutions.

There are also at least 20 well known central banks that have injected vast amounts of fiat into the hands of financial institutions. In the U.S., partisan Congress members and President Trump have approved a trillion-dollar package to combat the coronavirus effect on the economy. The federal government is even talking about ‘helicopter money’ by putting $1K or more into the hands of American residents. At the end of 2019, global debt had risen to $250 trillion and trillions more have been added within the last two weeks.

With all the massive printing and all the debt amassing, people have been scrambling for dollars and a short term fix throughout the chaos. The monetary system is looking like a Ponzi scheme where participants at the top are rushing to leave before the system collapses. With covid-19 attacking their revenue, corporations and banks are begging for more stimulus even after last year’s incredible stock market bull run. Still, the crisis has so many people shocked that they are not questioning the debt problem until they are faced with a credit crunch. The U.S. dollar and the rest of the fiat currencies are quickly showing their true colors as full-fledged Ponzi schemes.

In its most recent release, the Fed revealed that its balance sheet ballooned by $356.3 billion last week to a record high $4.668 trillion. I’m sure that next week’s number will show a balance sheet in excess of $5 trillion, headed to infinity and beyond!

— Peter Schiff (@PeterSchiff) March 19, 2020

The term Ponzi scheme derives from the method’s creator Charles Ponzi, an Italian born swindler who defrauded a number of investors with one of the first high-profile pyramid schemes. Essentially, Charles Ponzi conned paying participants into recruiting even more participants by promising big returns that were supposed to funnel downward. However, Ponzis typically collapse because they don’t sustain for very long. Top members of the Ponzi always leave the lower end participants with nothing after taking everything during a period of time.

Politicians and Bankers Faced a Margin Call – They Want You and Future Generations to Bail Them Out

Out of the $250 trillion+ of global debt, the U.S. commands a large sum ($23 trillion) of that, alongside countries like Japan ($11 trillion), and China ($6.2 trillion). Bureaucrats and central bankers from these countries have no intention of paying off their debts. They simply know that the Ponzi system will lose considerable amounts of money annually and they just create new debt to keep it going. Essentially, when the margin calls come in and debts are due, profits are paid to the politician swindlers and the bankers who sell the scam to newcomers. The profits stem from suckers who are willing to bolster the confidence of the U.S. dollar, the euro, pound sterling, yen, and manipulated stock markets.

Governments like the U.S. solely rely on the confidence of their creditors and they know they can cheat the game even more each year without citizens even knowing. Instead of growth, politicians shill debt in order to keep the Ponzi scheme going even stronger. If bureaucrats didn’t sell the fiat Ponzi scheme, the con would be uncovered easily and the citizens would likely toss them out of office. Crises and economic fires they started and tossed gasoline on are often used to keep the pyramid scheme still going in the face of a burning emergency.

While central banks and bureaucrats find ways to manipulate the world’s monetary system, cryptocurrencies can benefit global citizens by offering them a way out of the manipulated and monopolized game. As more people join the cryptoconomy by using digital assets like bitcoin cash (BCH), they can opt out of a system filled with rabid inflation and great busts and booms. While the central banks deal with the cash crunch and create more financial crises worldwide, cryptocurrencies will be there to offer financial sovereignty and censorship-resistant money. A monetary solution that offers such benefits in a society filled with multi-level fiat currency Ponzi scams will certainly thrive in the face of adversity.

What do you think about the scramble for dollars and how cryptocurrencies offer economic freedom in a world filled with monetary manipulation?

Disclaimer: This article is for informational purposes only. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Image credits: Shutterstock, Apple Stocks, Google Stocks, Fair Use, bitcoin.com/get-started/, CNBC, and Pixabay.

You can now purchase Bitcoin without visiting a cryptocurrency exchange. Buy BTC and BCH directly from our trusted seller and, if you need a Bitcoin wallet to securely store it, you can download one from us here.

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Gold and Bitcoin Markets Tested, While Central Banks Try to Quell Stock Market Rout

12/03/2020 by Idelto Editor

Central banks worldwide have been bracing for the worst, as the global economy has shuddered over the last seven days. On March 11, the Bank of England slashed rates by 50 bps bringing the base rate down to 0.25%. Meanwhile, Wall Street bankers and U.S. President Donald Trump want the Federal Reserve to slash rates even more and a few speculators expect a 100 bps rate drop by next week. As central banks are being accused of depleting their monetary policy tools prematurely, on March 12, European Central Bank President Christine Lagarde decided not to cut rates. Gold and crypto prices have also been under intense pressure for four consecutive days.

Also read: The 35 Most Influential Bitcoiners Dominating Crypto Twitter by Follower Count

Stocks Plunge, Bank of England Slashes Rates, ECB’s Lagarde Holds Back

It’s been a bad week for global markets, as the coronavirus outbreak has created a lot of fear and panic selling. On Thursday, March 12 the top three stock indexes in the U.S. have lost considerable value and British, European and Asian markets have felt the brunt of the economic storm.

The Dow Jones Industrial Average is down over 2,300 points at press time suffering the worst decline since 1987. The day prior, on Wednesday, the Bank of England (BoE) decided to follow the Federal Reserve’s move and cut the base interest rate by 50 bps. The bank now has a rate of 0.25% and immediately after the rate cut, the British pound took a hit against the U.S. dollar.

The market reaction was similar to the effect the Fed rate cut had on U.S. markets the week prior. The next day on Thursday, the European Central Bank decided to address the public and detailed that the bank would offer cheap loans to banks as a form of stimulus. However, unlike the Fed and BoE, European Central Bank (ECB) President Christine Lagarde decided not to cut rates.

It’s possible the ECB held back because of the adverse effects the rate cuts had in the U.S. and the U.K. Various economists also believe central banks are simply running out of monetary policy. Wall Street economist Henry Kaufman, who earned the name “Dr. Doom,” told the press he believes central banks are running out of ammunition to confront a deep recession. The 92-year old former Salomon Brothers economist is well known for predicting economic events throughout the ‘70s and ‘80s. Kaufman disclosed that the recent rate cuts executed by the Fed and the BoE “won’t address a crisis.”

How long until The Fed is literally printing toilet paper to help alleviate the crisis?

— Erik Voorhees (@ErikVoorhees) March 12, 2020

Meanwhile, at the same time, U.S. President Trump called the Fed’s recent move “pathetic” and further tweeted that the central bank could do better. “Our pathetic, slow moving Federal Reserve, headed by Jay Powell, who raised rates too fast and lowered too late, should get our Fed Rate down to the levels of our competitor nations,” Trump tweeted. “They now have as much as a two-point advantage, with even bigger currency help. Also, stimulate.”

Goldman Sachs Predicts the Fed Will Cut Rates by 100 bps and the End of S&P’s Bull Market, PBoC Rate Cuts, Italian Mortgage Industry Suspended

Further, mega bank Goldman Sachs sees the Fed cutting rates back by 100 basis points soon. Goldman also recently noted that they expect the “S&P bull market to end soon” after 11 years. In Italy, where the coronavirus outbreak has locked down the entire country, deputy economy minister Laura Castelli told BBC reporters that mortgage payments will be suspended across Italy. China’s central bank plans to cut rates soon as well, Ting Lu chief China economist at Nomura told investors on Thursday. “Without exception, these calls by the Premier will be implemented by the (People’s Bank of China) almost immediately, so we expect the PBoC to announce a targeted RRR cut in the next few days, possibly before or over the coming weekend,” the Nomura economist noted.

Japanese and Russian Stocks Feel the Wrath

The Japanese economy has been feeling the pressure of inflation and the economic effects of the virus spread as well. Reports note that Japanese bureaucrats are pushing the Bank of Japan (BoJ) to cut rates more and increase stimulus but policy options have become limited. Just like a number of central banks during the second half of 2019, the BoJ board members introduced a significant number of monetary easing policies.

Tokyo’s financial markets saw considerable losses all week, as Japan deals with escalating coronavirus fears. On Monday, the Nikkei index ended at a 14-month low with numbers not seen since 2016. Following Trump’s travel ban between the U.S. and Europe, the Russian stock market and the ruble also dropped exponentially. The ruble was shaved 4% against the U.S. dollar and the Moex Index fell by 6%. Russia’s RTS Index slipped by 1,000 points, to the lowest levels in two years.

Boeing is probably going to be one of the first “too big to fail” corporations that will require us to embrace corporate socialism with a bailout. It will be presented as an “emergency” and it will be 100% bipartisan.

The bailouts are coming again. They won’t come for you.

— Andreas ☮ 🌈 ⚛ ⚖ 🌐 📡 📖 📹 🔑 🛩 (@aantonop) March 12, 2020

Is Bitcoin a Risk Asset or Store of Value During Economic Uncertainty?

Throughout all the madness, the overall cryptocurrency market cap of over 5,000+ coins lost $50 billion in three days. BTC prices plunged over 20% in a 24 hour period and went below the $6K mark on March 12. The fall from the $9,100 range to under $6K in just a few days time has called into question the reliability of those who believe BTC is a store of value (SoV).

The SoV debate has been trending on social media and crypto-related forums over the last few days and SoV evangelists have been quieter. “So much for bitcoin being a safe store of value,” tweeted David Pinski. “Looks like fiat denominated hard currencies are still king. Even with the crypto set. Scratch that hypothesis,” Pinski added. “Cash looks like the safe haven today,” the Twitter account Moneypages wrote. “Gold down ~5%, Bitcoin down ~22%. This will be a test for cryptos and their claim to be a store of value.”

I’m buying. This is why bitcoin was invented

— Barry Silbert (@barrysilbert) March 12, 2020

Surely enough, a good number of people believe that the current economic storm will be a true test for bitcoin. “Want to know what the stock market would look like without down limits and circuit breakers and closing bells? Go look at bitcoin right now,” tweeted the Wall Street Journal author Paul Vigna on Thursday. One person asked Vigna if he thought it was of “any interest that crypto markets are aligning with traditional markets is interesting, even if exaggerated?” Vigna responded:

If bitcoin was really aligned [with] traditional markets, it would have sold off like this much sooner. As the riskiest asset, bitcoin would’ve been the first to go. Just my opinion.

Other people sincerely believe BTC is the best store of value and despite the price setback, it is still doing remarkably well. “If you had bought bitcoin exactly 1 year ago at a price of $3.779 you would be up 96% in dollars,” Crypto Mad Max tweeted. “Bitcoin is a store of value, with huge ups and downs from time to time look at the bigger picture,” Max added.

Former Mega Upload CEO, Kim Dotcom explained that he believes cryptocurrencies need more users as opposed to a slew of speculators. “Institutional investors are dropping out of Bitcoin. That’s good. Crypto needs more users, not more speculators. Mass utilization is accelerated by the economic crash. But Crypto needs more easy-to-use & secure apps allowing users to pay for real things in real-time at low fees,” Dotcom said on Thursday.

It’s proven beyond doubt now that Bitcoin is not a gold-like hedge, but a high risk asset class that’s first in line to be sold even before normal stocks. The “store of value” side is now completely debunked in addition to the “everyone needs to run a non-mining full node” side.

— Olivier Janssens🎗 (@olivierjanss) March 12, 2020

Gold Doesn’t Hold – Prices Slide Below $1,600 Range

Meanwhile, gold saw a quick rise during the early morning hours on March 12, but prices dropped $50 at 2:30 EST. One ounce of fine gold dropped below the $1,600 per ounce region to $1,589 but jumped back above the psychological $1,600 zone shortly after. At 4 p.m. EST, gold dipped again and touched a low of $1,570 per ounce and has been hovering around that region for roughly an hour at time of writing.

During the last few weeks, the whole world has been on edge from the coronavirus outbreak and the economic calamity that has followed. Throughout all of the mess, it is clear that crypto markets are facing the unknown as the economy was doing well since the 2008 crash. Bitcoin itself was born from the flames of the economic meltdown in 2008, but it has never experienced a full-blown recession.

Right now the world’s central banks in the EU, U.K., Asia, U.S., the Middle East, and Latin America are trying to ease the situation with monetary policy and stimulus. The Federal Reserve told the public it will inject $1.5 trillion into the hands of private banks on Thursday. Using the stimulus, the Fed plans to purchase Treasury Inflation-Protected Securities, notes, and bills “across a range of maturities.” It’s pretty clear what the central banks will do to try and circumvent an economic disaster, but people now wonder how cryptocurrencies will react to the possibility of financial collapse.

What do you think about the central banks and how they have been reacting with stimulus and rate cuts to battle the coronavirus’s effect on the global economy? What do you think of the ECB holding back on cutting rates for now? Do you think that cryptocurrencies like bitcoin will act as a store of value through these uncertain times? Let us know what you think about this subject in the comments section below.

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