Why is Unlimited Quantitative Easing (QE) Bullish for Bitcoin (BTC) Price?

  • At the beginning of this week, the Federal Reserve announced unlimited quantitative easing (QE) to combat the economic effects of COVID-19, a pandemic that has investors fearing the possibility of a recession as the unemployment claims rose to a record level.
  • The day the Fed said it would be printing unlimited amounts of cash, the price of bitcoin jumped over 10% just like the S&P 500 did, rallying nearly 8%.
  • Yesterday, the stimulus package of $2 trillion was agreed upon but it was unable to move the markets.

The Fed has long been pumping liquidity in the market and after the market carnage started a few weeks back driven by the novel coronavirus and oil price war, the central bank slashed the interest rates to zero, short-term Treasury bills even dropped into negative territory, and they were forced to work on their strategies.

The Fed decided to launch the bazooka of trillions of dollars in monetary and fiscal stimulus but as crypto commentators have reportedly been calling out, it has the underlying risk of inflation.

“This is how free money looks like. But there is no such a thing as a free lunch, is there. Society pays for this. Via inflation. The price to pay is inflation in the long run. Inflation expectations are popping and the long end of the treasuries curve is already pricing it in,” said,” said economist and trader Alex Kruger.

The last time such emergency measures and QE program were launched was during the financial crisis of 2008. Fed Chairman Jerome Powell said earlier this week that the central bank will continue its “aggressively and forthrightly” efforts. On his promise of unlimited bond purchases, he said the Fed won’t “run out of ammunition.”

It’s Bitcoin’s Time

Bitcoin price might be acting like a risky asset and moving along with the stock market but bitcoin believers, investors, and commentators are confident in the world’s leading digital asset and that it’s time for it to shine.

When it comes to price, in the time of crisis, everything gets sold off as investors look for cash. Even gold saw its biggest weekly decline since 2013 during this sell-off the same way it did in 2008.

Now, if we look at bitcoins’ history, the crypto asset was created right at the time of the financial crisis and as popular analyst PlanB said, BTC is made for this situation.

According to Kruger, QE infinity is bullish for bitcoin because of three reasons. In the short term, bitcoin is trading like a risk-on asset and it will uptrend just like other assets.

In the long-term, he said, Bitcoin is “a hedge against tail-risk of fiat systems collapsing, and odds of such an event increased marginally.”

And lower yields may also help on the margin, said Kruger. As we saw this time, following the QE announcement, the treasury yield curve collapsed and gold spiked just like in 2008. At that time, when QE was announced, it triggered the gold bull market. This time, the deflationary asset with limited supply is also expected to emerge as the winner once the dust settles.

Live Bitcoin (BTC) Price:

1 BTC/USD =$8,890.3767 change ~ -0.79%

Coin Market Cap

$163.45 Billion

24 Hour Volume

$7.94 Billion

24 Hour VWAP

$8.83 K

24 Hour Change


Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

AnTy has been involved in the crypto space full-time for over two years now. Before her blockchain beginnings, she worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


Please enter your comment!
Please enter your name here


Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Bitcoin’s Intrinsic Value has Effectively Doubled After Halving: JPMorgan Report

Bitcoin “markets effectively priced in a 25% decline in the amount spent on energy per day,” says the “Global Markets Strategy: Flows & Liquidity”...

China’s National People’s Congress (NPC) Suggests a Government-Backed Blockchain Fund

The National People's Congress (NPC) in China has proposed the creation of a government-backed blockchain fund in its ongoing annual meeting. The Chinese legislative body...

The Mysterious Entity that Caused the Bitcoin Network fees to Jump 146% in May

Bitcoin price has yet again taken a dive to $8,800, recording a drop of 4%. Meanwhile, Network Demand Score which is a metric incorporating network...

Ledger and Trezor Crypto Wallets Dismiss ‘Rumored’ Hack Through a Shopify Exploit

A hacker has allegedly compromised the databases of Ledger, Trezor, Keepkey and Shapeshift hard wallets in a Shopify exploit. These storages are considered to...

Tulip Trust Addresses are Used by Someone to Sign “Craig Wright is a Liar and a Fraud”

Some of the addresses that Craig Wright, who claims himself to be the pseudo-anonymous bitcoin creator Satoshi Nakamoto, has filed in the ongoing court...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today