BTC holds at $18K, rising on Friday as traders pushed for more before Steven Mnuchin decided to end some of the COVID-19 related facilities at the Federal Reserve so let’s read more in today’s Bitcoin news.
The US Treasury Secretary closed two major schemes that were set up to purchase corporate debt and other programs as well that were launched to lend to medium-sized businesses known as the Main Street Lending Program as well as another facility that supported asset-backed securities. These lending facilities played a huge role in reassuring financial markets after the 2020 global market crash in March. The Risk-on assets like equities surged alongside the safe-haven assets like gold and then the traders awaited for two potential outcomes: that the FED will always back the stock market and that their policies will debase the US dollar.
Bitcoin is still a young asset that shifts between safe-haven and risk-on depending on the convenience while it also surged against the FED dovish approach. Between March and now, the number one cryptocurrency increased by about 370% and surpassed the S&P 500, gold, and other traditional market rallies. The prospects of shrinking assistance program seemed bearish for BTC but its risks fell in the water as the cryptocurrency climbed another 2 percent before London’s and New York Opening bell so now BTC holds at $18K.
The rival markets were not so lucky since gold slipped by about 0.2 percent and the futures tied to the S&P 500 index got down by about 0.45% which pointed to a depressive opening once the US market opened. On the other hand, the US dollar increased by 0.04 percent against the top foreign currencies. Mr. Mnuchin decided to end the FED emergency lending platforms and then a huge chunk of which remained underutilized came back once Joe Biden gained a lead over the Republican current president Donald Trump in Georgia.
Krishna Guha, the vice chairman of Evercore ISI, said that this move of the Treasury is reckless by calling it “reckless politicization of market-stabilization policy.” He noted that Mnuchin was making sure that there’s no money left for the person that will come after him once Joe Biden becomes president officially. In the meantime, the analysts that weighed into the possibility that the Biden administration will reinstate the programs once the new president takes oath, they will have to start a new facility for unusual and exigent circumstances with the FED.
This explains why a downside correction in gold is possible and could be huge and why BTC acts resilient to the end of the catalysts that helped it boost the price to $18,000 in November from $3858 back in March.
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Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
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