Ultimate Test for Bitcoin in and Bitcoin out – Interest Rate cutsAugust 1, 2019
Bitmain’s Zou, stated, “Having a global currency is a demonstration of a country’s influence. It reflects the competitiveness of your country’s Economy,” Zou further added, “The fear is that Libra might replace renminbi’s position in the world.”
Facebook is likely to launch its Libra in 2020, thus presenting serious competition to the cryptocurrency ambitions of China. With the already existing 2.9 billion users, Facebook has an immediate leg up in the global cryptocurrency race. Facebook has control over financial data collection and eventually on the ability to conduct trade worldwide with the existing user base.
Meanwhile, Bitcoin has posted the first monthly loss ever since January. It appears that Bitcoin might end its winning streak, which spread over the past five months. The prices are currently down by nearly 9% when compared to the monthly opening price of $10,759. Investors were already prepared for the consequence of the Federal Reserve rate cut.
To cut the interest rates, the Federal Reserve will release more of dollars. This will cannibalize the value of the USD. Fiat money, therefore, is manipulated at will by the Reserve Bank. However, Bitcoin cannot as its supply is capped, and it will not increase.
Travis King Tweeted: “Tomorrow, Bitcoin will experience the first Fed rate cut in its history.” Perhaps the next recession will play the ultimate test for Bitcoin.
Donald J. Trump tweeted: “China is doing very badly, the worst year in 27 – was supposed to start buying our agricultural product now – no signs that they are doing so. That is the problem with China; they just don’t come through. Our Economy has become MUCH larger than the Chinese Economy is the last three years…”
Despite the monthly loss, the bullish bias has been retained in the long-term charts. It has been seen that the Bitcoin price has recovered to an underlying psychological level. Though the token remains Bullish, it is not clear if the upward trend of the token is sustainable.
LedgerX has recently announced that they will be launching their first of its kind physical futures in the US. When buying a contract, customers can do so with Bitcoin, and they need not pay in dollars. The contracts will pay traders out using Bitcoin, and it will be made available to both retail and institutional investors. When the contracts expire, investors get actual Bitcoin and not a cash equivalent. It is “bitcoin-in and bitcoin-out.”