The price of the main cryptocurrency went from USD 5,866 to USD 6,464 between 8:00 and 9:00 a.m. The US central bank will not have limits in the purchase of assets to compensate for the economy.
The US Federal Reserve (Fed) announced on March 23rd new measures to stabilize the economy of the country, in the face of the expansion of the coronavirus and the Covid-19 disease that it causes. The central bank stated that it will not have limits for the purchase of assets to reduce the impact of the pandemic, which could have influenced the rebound that Bitcoin exhibited in the markets.
That day, the price of the main cryptocurrency went from USD 5,866 to USD 6,464 between 8:00 and 9:00 a.m., according to data from LiveCoinWatch. Las March 15th, the Fed had announced that it would inject USD 700 billion to purchase securities (bonds) backed by both the Treasury and mortgages. Besides, it raised interest rates by up to 0.25%.
The announcement that the Fed made last March 23rd has led the US central bank to increase the levels of support to contain a possible economic recession.
Before the markets opened that day, the Fed highlighted that the Federal Open Market Committee (FOMC) will purchase the required amounts of Treasury securities and other agency-backed securities. Their objective is to support the good performance of the market and the effective transmission of monetary policies to the amplest financial conditions of the economy.
The decision gave rise to an immediate reaction by cryptocurrency markets as Bitcoin increased by 10.2% within only one hour. At the moment of writing this article, the price of Bitcoin was USD 6,313 per unit. Regarding the rest of the cryptocurrencies, their growth has been moderate, with Ether (ETH) at the top with 2.9% (USD 130.47), Ripple (XRP) gaining 1.69% (0.156369) and Bitcoin Cash (BCH) increasing by about 4,15% (equivalent to about USD 216.74).
Regarding the volatility in the last few weeks, specialists note that people tend to respond to situations of crisis by disposing of those assets that they consider the riskiest, which include cryptocurrencies. However, despite the current situation, Bitcoin has shown signs of recovery after its drop to USD 4,184 last March 12th.
The economic panorama is not complicated only in the USA but also on a global scale, especially in Europe, Asia and Latin America, where people are feeling the negative effects of the partial paralysis of the economy. In addition to that, it is important to mention the constant depreciation in the value of the national fiat currencies of countries like Mexico, Colombia, and Chile, among others.
All this has occurred less than two months before the upcoming Bitcoin halving, a reduction in the issuance of the cryptocurrency by half, scheduled to occur next May 13th. This event could theoretically leverage the pricing of the main cryptocurrency in the market, which would eventually lead it back its all-time highs like it has been able to do on several occasions.
By Alexander Salazar