The Current Financial Trend Will Boost Bitcoin
Some factors should make traders go short on Bitcoin following the 50 percent crash in March. The crash compelled numerous people to abandon the crypto domain as the liquidity of cryptocurrency markets fell recently.
Dan Tapiero of DTAP Capital and Gold Bullion International noted the unbelievable nature of the latest price action in the investment-level corporate bond market. Charts revealed that corporate bonds’ index is about to attain its lifetime highs following an extreme 20 percent retracement, coming from bonds bought by the Federal Reserve towards the stabilization of the economy.
Unfortunately, the trend is still in place even as the United States monetary authority promises to buy an unlimited amount of bonds ahead towards preventing corporations’ collapse.
Tapiero claimed that this will make gold and Bitcoin become further bullish, with reference to the fact that outsized inflation will rise in a rapid manner due to these monetary decisions.
Many cryptocurrency market participants have agreed that the measures by the Federal Reserve and government to provide liquidity for the economy will only boost Bitcoin. In a report, Arthur Hayes of BitMEX noted that Bitcoin may revisit $3k again if international markets experience decline but Bitcoin is still targeting $20k towards the end of 2020.
Hayes said this is because of the governments and central banks’ monetary and fiscal solutions enlisted to stave off a recession. Hence, pumping more fiat money inflation will chase a flat to reducing supply of real goods and labour. He continued that the only two things to own during the transition without regards to any system are gold and bitcoin.
Similarly, Dan Morehead of Pantera thinks that the printing of more paper money will alter the concept of simple supply-demand dynamics in the economy. Morehead also believes that the price of Bitcoin will soon become $20k+.