What the Federal Reserve’s Hawkish Tilt Means for Bitcoin
The Fed had also announced the acceleration of the close of the bond purchase program, citing concerns about higher inflation. The rate of inflation is uncomfortably high, Fed Chairman Jerome Powell said at the end of the two-day policy meeting.
After the COVID-19 pandemic hit the country in March 2022, the Federal Reserve lowered interest rates to near zero levels. And he was spending $ 120 trillion every month to buy treasury bills as part of his crisis bond buying program.
The drop followed the overnight sell-off on Wall Street when the tech-rich Nasdaq fell more than 2.5%. Experts said investors are reallocating money from risky bets like Bitcoin and tech stocks.
“On the one hand, a tightening of monetary policy may lead to slower growth in demand for Bitcoin, as many use it to hedge against inflation, and less QE, in theory, means less inflation. “said Joe DiPasquale of crypto hedge fund BitBull. CoinDesk. QE, or qualitative easing, is a monetary policy tool in which central banks buy long-term securities to increase the money supply in the economy. Less QE decreases the money supply in the economy. The Federal Bank’s asset purchase program (buying $ 120 billion worth of treasury bills) was the largest QE in history.
First publication: STI