Categories: Bitcoin Business

What’s Driving Up Bitcoin Price? Central Banks, Says FT Reporter

Click here to view original web page at cointelegraph.com

The Financial Times' chief correspondent for international finance has argued that central banks can ironically be credited for igniting Bitcoin’s price.

In a column for Nikkei Asian Review on Aug. 21, Henry Sender said that banks’ dovish policies are spurring an increasing recognition of cryptocurrencies as safe-haven assets.

Hedging big macro risks with Bitcoin

Analysts anticipate more dovish announcements from the Federal Reserve at this year’s central banking meeting in Jackson Hole, Wyoming, later this week.

In July, Fed Chairman Jerome Powell cut interest rates for the first time in over a decade, continuing the dovish tone set by the European Central Bank.

In China, the yuan fell below the watershed mark of 7 to the U.S. dollar on Aug. 5 and government bonds continue to be plagued by volatility, with little assurance of solid yields.

Against this backdrop, Sender argues that the actions of developed market central banks are turning Bitcoin from a speculative instrument into a solid investment that can help to hedge big macro risks.

He cites a report from Grayscale Investments’ research unit, which similarly argued that:

"Bitcoin has the potential to perform well over the course of normal economic cycles as well as liquidity crises, especially those involving currency devaluations [...] [it has] store-of-value characteristics similar to real assets like gold, with hard-money attributes like immutable scarcity."

Indeed, Bitcoin’s increasing correlation with the precious metal has not gone unnoticed — yet further consolidating its moniker as digital gold. In the last 3 months alone, the correlation between the assets has almost doubled.

A perfect storm

In China, a government concerned about soaring capital flight considers cryptocurrency to be among the channels for such outflows. This — alongside other factors — has accelerated the central bank’s actions to develop its own central bank digital currency, insider sources claim.

According to an expert at the informal bitcoin association of China, cryptocurrency purchases have shot up 50% in recent months, Sender notes — with the caveat that the figure remains difficult to verify.

Earlier this month, digital asset research firm Delphi Digital published a report arguing that central banks’ monetary easing and the increasing risk of fiat currency devaluation are likely to catalyze the price of both Bitcoin and physical gold. Macro factors are creating the perfect storm to ignite the coin’s price appreciation, the report concluded.

Anthony Pompliano, who recently stated that the European Central Bank’s expected dovish turn will be “rocket fuel” for Bitcoin — a view that is shared by those in the traditional financial sector.

In a column for Nikkei Asian Review on Aug. […]

cinerama

Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Share
Published by
cinerama

Recent Posts

Wealth manager launches world-first bitcoin yield fund

A US-based wealth manager has claimed an industry milestone with the launch of the first cryptocurrency derivatives-based yield fund on… Read More

5 hours ago

CME Group To Launch Bitcoin Options In Early 2020, Cites Client Demand

CME Group Inc (NASDAQ: CME ) announced Friday that it will launch options on its Bitcoin futures contracts in the… Read More

5 hours ago

Nigerian Rocks Crypto World By Returning NGN 28.8 Mn Worth Of Bitcoin That Was Sent To Him In Error

Here’s the latest on today’s edition of “Wait, What?!”; A Nigerian man woke up one day to find that NGN… Read More

5 hours ago

Bakkt: A Big Boost For Bitcoin (BTC) or Will It Flop?

Share Tweet Send Share The launch of the largest institutional bitcoin product of the year is finally upon us. Can… Read More

5 hours ago

Bitcoin (BTC) Metrics Pointing to Bullish Returns

Share Tweet Send Share Many analysts over the years have said that bitcoin is a speculative bubble, comparing it to… Read More

5 hours ago

Bitcoin Sheds $10,000 Support Again Ahead of Bakkt Launch

Ahead of the launch of Bakkt’s Bitcoin (BTC) futures, bears have continued to assert control over the cryptocurrency market. Ouch.As… Read More

11 hours ago

This website uses cookies. We use these cookies to collect data about your interaction with our website for the purpose of continuously improving your experience with our site. For more information we encourage you to read our privacy policy.

Read More