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Speculations are rife about the possibility of the US Federal Reserve adopting a negative interest rate policy (NIRP) anytime now.
Analysts often argue that unorthodox monetary policies such as negative interest rates are inherently inflationary. According to many, a naturally deflationary asset likestands the perfect chance to draw more investments from strategic institutional investors when the largest economy in the world is drawn towards such inflationary moves.
On that note, these observers have argued that the U.S. President’s open endorsement of NIRP could be one of the possible factors driving Bitcoin’s recent surge. However, the million-dollar question here is, does the Fed really hope to revive the economy with a polarizing policy such as NIRP?
More on that and other big stories in our Cryptocurrency News Roundup for May 14, 2020.
‘The Fed will do what’s necessary to maintain liquidity,’ however negative interest rates seem unlikely at the moment, said Gary Schollsberg, a Global Strategist for Wells Fargo. His comment, however, was in stark contrast with what President Trump had hinted just a couple of days ago.
In yet another open endorsement of NIRP, the POTUS tweeted earlier on Wednesday saying, ‘As long as other countries are receiving the benefits of Negative Rates, the USA should also accept the “GIFT.’
The Bitcoin price was subject to a rapid decrease on May 10 that caused it to reach a low of $8,117. Since then, BTC has been clawing back upwards, reaching a high between the 0.786-0.88 Fib levels at $9,650-$9,800, which is the final area prior to the price creating a double-top at $10,060.
If the price increases above this level, the current movement cannot be considered a retracement anymore.
You may have noticed that Bitcoin transaction fees were on the rise starting late-April. The trend has so far continued into mid-May with the average In Bitcoin and most cryptocurrencies, users need to pay a nominal fee to make transactions, or in other words, send... More going as high as $2.76 earlier on Thursday.
The last time the fees were this high was in July 2019 — around the same time when the BTC-USD pair recorded the yearly-high of $13,200.
Some analysts are of the view that the current spike in transaction fees are a direct result of the Bitcoin ecosystem adjusting itself to post-halving market dynamics.
In a historic first, a Chinese steelmaker and an Australian mining company completed an RMB-denominated letter of credit transaction via blockchain. While the transaction marks another milestone for blockchain adoption in international trade, some pundits see the news as an example of Beijing’s aggressive attempt to dampen USD dominance of cross-border transactions.
When looking at a shorter-term chart, we can see that the ETH price is following a descending resistance line, and has been doing so since the April 30 high. The price was very close to validating this line for the third time.
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