With Bitcoin dipping below $10,000 again, the chief correspondent for international finance of Financial Times has suggested that Bitcoin’s price can be influenced by central banks.
On the 21st of August, Nikkei Asian Review’s column reported that Henny Sender stated that the prompt recognition growth of cryptocurrencies as safe-haven assets are greatly affected by the banks’ dovish policies.
A few weeks ago, a Hong Kong-based hedge fund manager was in Tokyo when a mainland Chinese woman contacted him online using a feature on her mobile phone that recognized fellow Chinese in the area. She was trying to sell bitcoin that she purchased in China for Japanese yen.
Cryptocurrency analysts are expecting that this year’s central banking meeting in Jackson Hole, Wyoming, later in the week will have numerous dovish announcements from the United States Federal Reserve.
Chairman of the Federal Reserve, Jerome Powell had cut interest rates in July. Following the dovish tone set by the European Central Bank.
To oppose this backdrop, Henny Sender mentioned that the central banks’ actions in developed economies are making Bitcoin from an uncertain means into a stable investment that can assist to hedge huge macro risks.
She talked about a report from the research unit of Grayscale Investments, which likewise said that “Bitcoin is inherent to achieve great results despite the liquidity crises, throughout normal economic cycles, particularly those involved in currency devaluations. Bitcoin’s store-of-value qualities are comparable to actual gold, with traits of hard-money like changeless scarcity.”
Bitcoin’s association with gold has indeed been very noticeable. Further being known as digital gold. Within the last three months, the association between Bitcoin and Gold has almost multiplied.
A Chinese government who is concerned about soaring capital flight recognizes cryptocurrency to be among the channels for such currents. According to insider sources, this – together with other factors have expedited the People’s Bank of China’s decision making in developing its own central bank of digital currency.
Cryptocurrency purchases in China have increased by 50% in the past few months, concurred by an expert at the informal Bitcoin Association of China. Henny Sender notes – with a hint that there is no way to know for sure.
There are several factors behind this surge. In any case, the noticeable surge in Chinese demand has expedited the day when People’s Bank of China, will select its own central bank digital currency.
In early August, Delphi Digital had published a report saying that central banks’ monetary easing and the risk of fiat currency devaluation being increased will most likely generate the price of both Gold and Bitcoin. According to the report, macro factors are creating these events to influence the coin’s price increase.
The European Central Bank’s anticipated dovish turn will be Bitcoin’s “rocket fuel”, Anthony Pompliano said. A scene that is shared by the people in the traditional financial sector.
Seymour Nunez is a contributing writer for Cash Tech News who enjoys writing about the intersection of blockchain technology and everyday life.
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