Bitcoin To $30,000? Fed Unveils New Tool To Bailout Non-US Banks
2023年3月20日 - 06:00PM
NEWSBTC
As the US banking crisis is growing into a global banking crisis,
the Bitcoin price is trading above $28,000 again, showing an
extremely strong trend that suggests further gains. One of the main
reasons to remain bullish in this regard is that the money printer
has been turned on once again by the US Federal Reserve (Fed). As
NewsBTC reported, the Fed added a whopping $300 billion to its
portfolio last week, offsetting half of all quantitative tightening
(QT) in the last 12 months. And the money printer will run even
hotter starting today. Fed Announces New Swap Lines On Sunday,
March 19, the Federal Reserve and six of the world’s largest
central banks announced a “coordinated action” to facilitate
dollar-denominated banking transactions to calm financial markets.
The Fed, the European Central Bank (ECB), and the central banks of
Japan, the United Kingdom, Switzerland, and Canada will expand
their swap operations, which central banks use to exchange foreign
currency with each other, starting today, Monday, and continuing at
least through the end of April. The move is intended to provide
central banks outside the United States with a better liquidity of
the US dollar. The central banks reportedly agreed to increase the
frequency of seven-day dollar currency swaps from weekly to daily.
The swaps have been in place for several years – previously with
weekly maturities. Related Reading: Bitcoin Bullish Signal: NUPL Is
Forming A Golden Cross How it works? The Fed lends dollars to
foreign central banks. At the end of the term, the Fed swaps the
currencies back at the original exchange rate and collects
interest. It’s worth noting that the statement comes just hours
after UBS announced its so-called “takeover” (aka bailout) of
Credit Suisse. Here’s Why It’s Bullish For Bitcoin For BitMEX
founder Arthur Hayes, the new swap lines are “another way to
bailout non-US banks that isn’t obvious to the average person.”
According to him, it is politically dangerous for the Fed to bail
out foreign banks when so many small American banks need help. The
WSJ reported a few days ago that 186 banks face the same risks as
Silicon Valley Bank. At the same time, the Fed can’t let foreign
banks throw their government bonds into a liquid market and screw
up even more. The solution, according to Hayes, are swap lines. The
Fed gives USD liquidity to major central banks like the ECB, while
the ECB allows EU banks to give it US treasuries at par. This
ensures that the ECB can give US dollars to the banks, which can
then handle any outflows of USD deposits. Related Reading: Here’s
When Messari CEO Ryan Selkis Expects Bitcoin To Reach $100,000 As a
result, the US treasuries market is stabilized because no
treasuries are actually sold. Any profit and loss is borne by the
central bank, which can absorb infinite losses, which is reflected
in the ECB’s balance sheet. “Long Term: all treasuries held in the
entire developed country banking system can now be lent against at
par. Money Printer Go Brr,” Hayes concluded. Practically, the Fed
becomes the global lender of last resort. Following the recent
news, the Bitcoin price is currently showing an extremely strong
upward trend. As the 1-hour chart below shows, the hourly uptrend
is still intact. At press time, Bitcoin traded at $28,160. Featured
image from iStock, chart from TradingView.com
Quant (COIN:QNTUSD)
過去 株価チャート
から 11 2023 まで 12 2023
Quant (COIN:QNTUSD)
過去 株価チャート
から 12 2022 まで 12 2023