$ 28,899.00 4.02%
$ 1,938.73 3.49%
$ 48.47 8.19%
$ 0.083293 4.28%
$ 7.59 5.37%
$ 1.32 9.51%
$ 0.000130 7.50%

2020 Federal Reserve repo operation to boost Bitcoin credibility

Federal Reserve repo operation to boost Bitcoin credibility

2020 Federal Reserve repo operation is just around the corner! Federal Reserve’s next infusion into the repo markets is sure to cheer up Bitcoin investors as well. Beginning December 13, the Fed will inject close to four hundred twenty-five billion dollars ($425B) to meet the liquidity demands of the banks. The announcement was made in September this year when the Fed also moved towards interest rate cuts.

After the rate cut spree in 2019, the Fed is hoping to soothe the markets by injecting billions of dollars into the markets. The effect on Bitcoin will be positive since such irresponsible fiscal moves are not going to affect a decentralized cryptocurrency. The whole narrative will certainly work in favor of the Bitcoin price.

2020 Federal Reserve repo operation to inject Billions of dollars

As per the official announcement, 2020 Federal Reserve repo operation will aim to inject four hundred twenty-five billion dollars ($425B) so that ample money supply remains in the financial system. This will help lower the money market pressures and ultimately support policy decisions. Such a large amount of money injections within just a month will certainly flood the market with cheap money.

Additionally, the national debt of the United States will touch twenty-three trillion dollars ($23T) mark in November 2019. This marks an increase of around one and a half-trillion dollars ($1.4T) this year alone. This will surely build a strong case for safety assets and Bitcoin’s credibility will attract more investors towards its safety.

Helping the Bitcoin cause

The repo operations have done nothing than keep the market afloat while the fundamentals remain shaky. The currency infusion is thrice the size of Bitcoin’s entire market capital value. That sums up the amount of money that will go into circulation within a small period.

Naturally, it will shore up the demand for safe assets in the investor community. Bitcoin enthusiasts will capitalize on its decentralized nature and help break away from the conventional financial system. Since there is no centralized authority, Bitcoin price won’t be affected in any way due to this absurd repo operation. Due to such large scale 2020 Federal Reserve repo operations, Bitcoin price has increased by four thousand per cent (4000%) in the past five years. This latest move will further bolster bitcoin’s credibility.

Image Source: Pixabay

Gurpreet Thind

Gurpreet Thind

Gurpreet Thind is pursuing Masters in Electrical Engineering at University of Ottawa. His scholarly interests include IT, computer languages and cryptocurrencies. With a special interest in blockchain powered architectures, he seeks to explore the societal impact of digital currencies as finance of the future. He is passionate about learning new languages, cultures and social media.

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