Wednesday, 10 June 2020

Bitcoin Briefly Pops Past $10K as Fed Says Rates May Stay Near 0% Until 2022

By Daniel Cawrey




Bitcoin saw a quick, short-lived run past $10,000 after the head of the U.S. Federal Reserve said Wednesday that interest rates will remain near 0% until the end of 2022 and its bond buying program would continue. 

Bitcoin (BTC) was trading around $9,894 as of 20:00 UTC (4 p.m. ET), gaining 1.6% over the previous 24 hours. 
At 00:00 UTC on Wednesday (8:00 p.m. Monday ET), bitcoin was changing hands around $9,783 on exchanges like Coinbase. Its price dipped to as low as $9,709 at 09:00 UTC (5 a.m. ET) before buying volume picked up, pushing the price above its 50-day and 10-day moving averages, a bullish technical indicator.  

Speaking after the Federal Open Market Committee’s two-day June meeting, Chairman Jerome Powell said the central bank will likely keep interest rates near 0% until 2022. That sent bitcoin briefly to $10,000 before it dropped back.  

“There is great uncertainty about the future,” Powell said. “At the Federal Reserve, we are strongly committed to use our tools to do whatever we can for as long as it takes to provide some relief and stability to ensure that the recovery will be as strong as possible.” 

Cryptocurrency stakeholders see the Fed’s announcement of no changes as reason to buy bitcoin. “Liquidity can’t paper over insolvency,” said Scott Bambacigno, a vice prescient at crypto exchange software provider AlphaPoint, “When you are deep in debt, more debt isn’t going to help. The Fed can ‘print money’ but they cannot ‘print jobs’. Assets like gold and bitcoin should do well if the economy continues in this direction.” 

While the price did briefly pop, bitcoin’s brief run to $10,000 quickly lost steam. ”A lot of analysts may be looking for the Fed decision to move BTC, but It’s important to bear in mind that over a long time horizon bitcoin remains uncorrelated to traditional markets,” said Aaron Suduiko, a research analyst for crypto liquidity provider SFOX. 
Indeed, the upward trajectories of bitcoin seem totally unhinged from stock indexes like the S&P 500. 

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