Bitcoin Eyes Price Rally as Fed Announces Pseudo-QE

Bitcoin is about to become a hot asset as the US central bank goes ahead with its pseudo-quantitative easing program, believes a few bigwigs.

Travis Kling, the chief investment officer at California-based Ikigai Asset Management, called bitcoin an insurance policy against Jerome Powells decision to resume Treasury purchases. The Federal Reserve chairman on Tuesday confirmed that they would purchase short-term bonds to expand their balance sheets.

Feds move, according to Kling, signals a liquidity crunch in the US market, which means the central bank is injecting a fresh supply of dollar-denominated assets to stimulate the US economy. It is an equivalent of quantitative easing (QE).

Welcome to QE4, tweeted Kling.

"I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs."
-Jay Powell, today

Bitcoin is an insurance policy against monetary & fiscal policy irresponsibility.

Welcome to QE4.

— Travis Kling (@Travis_Kling) October 8, 2019

Fed: Everything is Fine

Powell refused to call the Treasury Purchase a QE program, stating that it is nowhere the same as the crisis-era program launched after the 2008 financial crisis.

I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis, he told the National Association of Business Economists.

The weight of the Feds decision is going to fall on an oversupplied US dollar – at least in the short-term. Moreover, another factor that could further weaken the greenback is Powells inclination towards another rate cut.

The Fed chief coupled his Treasury-buying announcement with another inflationary news. He said the Fed could cut benchmark rates by 25 bps at the next Federal Open Market Committee meeting. That shows that Powell is adding more insurance against market uncertainties caused by, as he said, trade, Brexit, and other issues.

Meanwhile, staunch bitcoin skeptic and gold bull Peter Schiff said that Feds latest decisions proved that the US economy is in bad shape. The Euro Pacific Capital CEO tweeted:

Within a few months it's likely that the Fed's balance sheet will exceed the $4.5 trillion peak it hit prior to the Fed doing QT. Sometime in 2020 the Fed's balance sheet will grow beyond $5 trillion, and will likely keep growing indefinitely. But don't worry, it's not QE!

— Peter Schiff (@PeterSchiff) October 8, 2019

If it looks like a duck, walks like a duck, and quacks like a duck, its a duck. No matter what Powell claims, the Fed is doing QE, as I predicted it would. The goal is to suppress interest rates to sustain debt and asset bubbles. The only difference is this time in wont work!

Unlike Kling, Schiff thinks Gold would beat bitcoin in terms of gains against a weaker dollar.

Chinas Most Recent Gold-Buying Spree Tops 100 Tons @schiffgold

— Peter Schiff (@Pet ...

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Tags: Federal Reserve System, Bitcoin, Quantitative easing, Travis Kling, Peter Schiff, Balance sheet, United States Department of the Treasury, Ikigai Asset Management, Jerome Powell, Chief investment officer