Corona virus causes residual liquidity
Repo is designed to provide temporary liquidity to lenders. As Toiyeubitcoin noted before, reality is almost identical to creating fiat value unexpectedly.
The Fed's move is in response to the corona virus when the economy is hit, which cut interest rates significantly this week.
The amount of money the Fed injected into the economy on Thursday was worth the equivalent of about 9.8 million BTC – more than half of the total supply mined.
The overall demand for repo cash in recent weeks has exceeded the Fed's own limit, Wall Street Journal reported Friday.
Bitcoin commentators quickly raised the alarm of the fiat economy, based on money that had no intrinsic value and was not backed by any verifiable assets. come on.
“Cut interest rates and print money. These are central bank tools, ”Morgan Creek Digital co-founder Anthony Pompliano write on Twitter last week.
More dollars, no more value
The outbreak of corona virus has made many systems of traditional banks become unstable. Stocks have seen historical volatility, while declining rates and declining levels of oil consumption have seen many countries lose their fiat currencies.
Such fragility puts hard currency like Bitcoin in sight. In a world where money is limited and can be controlled without being manipulated, there is no need for the foreign exchange market, nor the need to “control” the economy by central banks.
Bitcoin's reliable supply means it has a high stock-to-flow ratio. The creator of the stock-to-flow model points out that it is co-linked with the Bitcoin price, so the price will reach $ 100,000 at some point in 2021.
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According to CoinTelegraph
Translated by ToiYeuBitcoin