Cryptocurrency Community Reacts as US Pumps Trillions into Economy

Bitcoin on US Dollar

The recent coronavirus pandemic had affected the U.S. economy. It has been a serious challenge for the Fed to deal with the economic crisis during the pandemic. The U.S. is among the top countries to be affected by the coronavirus. Lockdowns and overall measures taken to stop the spread of the virus had a worse impact on the economy, and the Fed had to take unprecedented actions.

With millions of Americans going jobless, the thing seems to be even worse than predicted. As the economy was going nowhere, the Federal Reserve had other ideas as they decided to inject $2.3 trillion into the U.S. economy.

The economist has praised the decision, and even President Trump has praised the swift and fast action taken by the Feds during a time when the country is fighting against the coronavirus. There are speculations and risks, but only time will tell if this decision alone could save the economy.

Fed Chairman Jerome H. Powell is keen to take any step necessary to prevent the economy from another great depression. 

Jerome H. Powell

“Powell’s mantra is do whatever it takes for as long as it takes,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics.

The complete details of the announced package are yet to come, but 350 billion is expected to be set aside to help the small business, $250 billion in unemployment insurance benefits, and $500 billion in loans for distressed companies.

Impact on Bitcoin and reaction of Crypto Community

The historic package boosted the Bitcoin and overall Cryptocurrency market. The price of Bitcoin climbed once again as the Federal Reserve made the decision. Overall, the community believes that this largest economy rescue package means a surge in the price of Bitcoin and crypto in general.

Bitcoin and Cryptocurrency Community Reacts as US Pumps Trillions into Economy

The Bitcoin community seemed excited and amazed at the decision.

“The Fed’s $6 trillion stimulus plan would be enough to buy the entire market cap of Bitcoin more than 48 times,” Anthony Pompliano said via a tweet recently.

In another tweet, Jason Yanowitz, one of the co-founders of Bitcoin, stated that “It’s time to move your fiat into [Bitcoin]. There is no way your dollars can keep their value after pumping $6 trillion into the system,”

When it comes to comparing the traditional currencies with cryptocurrencies, one of the major criticism faced by cryptocurrencies is that they are volatile and unstable. Now that this much money is being injected into the economy, we might see instability in the dollar rate. This might push people to invest in Bitcoin.

The COVID economic crisis is the first crisis faced by the Bitcoin since it was launched. At the start, the market supposed that it might perform as gold, but we saw a decline in the price, but as the economy started to stabilize, the price once again increased and we saw recovery once again. Predicting anything in the crypto space is not easy. A lot is going on, and only time will tell if Bitcoin succeeds in acting as a hedge against inflation and a store of value.

Leave a Comment