Home Coins Bitcoin (BTC) Federal Reserve's Major Policy Shift to 'Push Up Inflation' Could Send Bitcoin...

Federal Reserve’s Major Policy Shift to ‘Push Up Inflation’ Could Send Bitcoin Price to $500K


Bitcoin.com Wallet Users Can Now Purchase More Than 10K Worth

The U.S. Federal Reserve has announced a significant policy change to push up inflation. Bitcoin is set to greatly benefit from this policy change. Not only the price of bitcoin could surge past $500K, but a number of companies have also begun moving their reserves into the cryptocurrency to hedge against higher inflation.

Fed Officially Set to Push Up Inflation

The Federal Open Market Committee announced on Thursday significant changes to its policy strategy. The announcement coincides with Fed Chairman Jerome Powell’s speech to a virtual meeting of the annual Jackson Hole economic symposium.

All 17 top Fed officials agreed to a policy of “average inflation targeting,” allowing inflation to run “moderately above 2%” for some period of time. This means the Fed will be less inclined to hike interest rates when the unemployment rate falls, CNBC noted. Powell said:

Many find it counterintuitive that the Fed would want to push up inflation. However, inflation that is persistently too low can pose serious risks to the economy.

While the Fed chairman did not clarify what “moderately above 2%” means, Dallas Fed President Robert Kaplan said Thursday that it meant inflation in a range of a 2.25% to 2.5% annual rate.

The market has been expecting Powell’s speech about the Fed’s higher inflation policy. “When the bill comes due, there are two ways out,” Open Money Initiative co-founder Jill Carlson opined, adding that the first is to “Hurt the poor with inflation” and the second is to “Hurt the rich with taxation.” Carlson added, “The Fed just made option A the official policy.”

1595858606 623 3iq Files IPO for Ether Fund to Trade on Canadian1595875088 428 29 Cryptocurrencies Delisted on Liquid Exchange to Comply With Singapores

Some people commented on Twitter that a “Historic Brrrrrrrrr” is incoming, referring to the sound that a money printing press makes when left running. Responding to the policy shift news, Capriole Investments founder Charles Edwards tweeted:

The beginning of the end of fiat.

Bitcoiners view the Fed’s announcement as bullish. Following Powell’s speech, a number of people took to social media to remind others of the benefits bitcoin offers. Mimesis Capital Louis Liu wrote, “Powell is friend of bitcoin,” while many others chimed in to just say “buy bitcoin.” Abra CEO Bill Barhydt commented: “Bitcoin doesn’t need the Fed to succeed but if they insist on throwing gasoline on the fire then so be it.”

“The Fed, under the leadership of Jerome Powell, continues to be Bitcoin’s biggest booster,” Gemini Exchange co-founder Tyler Winklevoss wrote. He made a case on Thursday for a $500K bitcoin as “ultimately the only long-term protection against inflation.” He explained that the price of the cryptocurrency could appreciate 45 times from today’s price, meaning it could hit $500K per coin or even higher. The price of BTC stands at $11,453 at the time of writing.

Some businesses have already moved their reserves into bitcoin to hedge against higher inflation. Nasdaq-listed company Microstrategy recently announced that it had converted reserves worth $250 million into bitcoin for this purpose. The company explained that it “observed distinctive properties of bitcoin that led it to believe investing in the cryptocurrency would provide not only a reasonable hedge against inflation, but also the prospect of earning a higher return than other investments.” Following Microstrategy, Canadian restaurant chain Tahini’s converted all of its cash reserves into bitcoin while software company Snappa allocated 40% of its cash reserves into the cryptocurrency.

What do you think about the Fed’s new inflation policy? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.





Source link

- Advertisement -
Mr Bitcointe
Mr Bitcointehttps://www.bitcointe.com/
“Fact You Need To Know About Cryptocurrency - The first Bitcoin purchase was for pizza.” ― Mohsin Jameel
474FansLike
76FollowersFollow
4,567FollowersFollow
5,261FollowersFollow
1,550FollowersFollow
2,230SubscribersSubscribe
USD - United States Dollar
EUR
1.17
GBP
1.29
CHF
1.09
NOK
0.11
JPY
0.01
CAD
0.75
AUD
0.72

Most Popular

Twitter’s Jack Dorsey takes aim at Coinbase’s apolitical stance

Twitter CEO Jack Dorsey has taken major U.S. crypto exchange Coinbase to task over its open letter to employees published on Sep 28. The letter,...

Dash adjusts block reward percentage to improve the economics of its network

Dash Core Group, the entity responsible for developing the privacy-focused coin DASH, publicized fresh changes to the asset's proof-of-stake network on Sept. 30. "Dash...

Crypto Bets on the US Election Show Joe Biden Winning the Presidency by 60%

During the first half of the year, betting portals that allow people to wager cryptocurrencies on the upcoming U.S. election had shown...

ICON Development Roadmap Update — September 2020 | by ICON Foundation | Hello ICON World | Sep, 2020

ICON 2.0 Timeline and Gangnam TestnetGreetings ICONists,This month was highlighted by the announcement of our new and improved blockchain, ICON 2.0: BATANG. For the...
bitcoin
Bitcoin (BTC) $ 10,813.90
ethereum
Ethereum (ETH) $ 362.69
ripple
XRP (XRP) $ 0.242136
tether
Tether (USDT) $ 0.999984
bitcoin-cash
Bitcoin Cash (BCH) $ 228.44
bitcoin-cash-sv
Bitcoin SV (BSV) $ 175.08
litecoin
Litecoin (LTC) $ 46.47
eos
EOS (EOS) $ 2.59
binancecoin
Binance Coin (BNB) $ 29.08
okb
OKB (OKB) $ 6.24
tezos
Tezos (XTZ) $ 2.24
leo-token
LEO Token (LEO) $ 1.27
cardano
Cardano (ADA) $ 0.103117
monero
Monero (XMR) $ 110.85
stellar
Stellar (XLM) $ 0.075452
chainlink
Chainlink (LINK) $ 9.98
huobi-token
Huobi Token (HT) $ 4.61
tron
TRON (TRX) $ 0.026337
usd-coin
USD Coin (USDC) $ 1.00
dash
Dash (DASH) $ 70.62
neo
NEO (NEO) $ 19.58
iota
IOTA (MIOTA) $ 0.286063
nem
NEM (XEM) $ 0.116498
zcash
Zcash (ZEC) $ 65.01
maker
Maker (MKR) $ 569.90
paxos-standard
Paxos Standard (PAX) $ 1.00
ethereum-classic
Ethereum Classic (ETC) $ 5.41
vechain
VeChain (VET) $ 0.013533
true-usd
TrueUSD (TUSD) $ 1.00
ftx-token
FTX Token (FTT) $ 3.63
kucoin-shares
KuCoin Shares (KCS) $ 0.871371
waves
Waves (WAVES) $ 2.63