El Salvador President Nayib Bukele took a victory lap on Monday after the Bank of England’s British pound rapidly depreciated against the dollar. The institution has since resumed quantitative easing. Its action marks a clear pivot that many in the Bitcoin community predicted central banks would be forced into months in advance. Bukele’s Callout Bukele tagged the Bank of England with a triumphant “Told you,” over Twitter, scoring over 14,000 like and 2000 retweets from his followers. His brief comment…
The backdrop of current worldwide economic trouble is a concern when it comes to the performance of Bitcoin. However, up till this moment, Bitcoin has done well such that it posted year-to-date gains while the performance of equities market is still well beneath its level in the beginning of 2020.
At the moment, there are two swiftly emerging events which may prompt both prevalent adoption and accumulation for Bitcoin. These two events have the potential to bolster the benchmark cryptocurrency in the coming months and years.
The emergence of these events is line with the signs of underlying strength revealed by Bitcoin, pointing to the possibility of a forthcoming extended uptrend. These are manifesting as market participants continue to argue about hard money.
Bitcoin seems to be a model form of hard money due to its deflationary and decentralized feature. Since it was developed in 2009, it has grown intensely, thereby showing that people have recognized it as a form of hard money.
Before the emergence of Bitcoin, the necessity of a decentralized digital asset has always been in theory, but the events that happened over the previous few months have established the reality and relevance of this need.
Arcane Research released a report recently noting the bloating of the U.S. Federal Reserve’s balance sheet due to its efforts to ease the economic effects of the COVID-19 crisis. The report noted the ballooning of the balance sheet by $2.4 trillion, or 58 percent, since the end of February.
The balance sheet is growing massively as the Federal Reserve continues to inject money into the economy to prop the markets. This has been quite effective in the near-term but the long-term consequences may be serious.
It is pointing to the necessity of hard money as Bitcoin is looking forward to its mining rewards halving event, which will reduce its yearly inflation rate by more than 50 percent. According to Arcane Research, the event may attract more investors.
On-chain network activity is likewise growing while accumulation rates have increased; all of these may seriously bolster Bitcoin.