In the latest episode of Good Morning Crypto, the focus was on the Federal Reserve’s efforts to ease and support banks across the world. Seven major banks announced coordinated action to increase U.S. dollar liquidity provision in global markets through swap lines. The Fed is in a difficult position due to increased interest rates, which have put many banks around the world in a bad spot. If these banks start dumping US treasuries, the price is likely to decrease even further. Bitcoin’s price is currently at an all-time high and is establishing itself at important levels. During previous crises, Bitcoin did not behave as a safe haven, yet in the current situation, it is being seen as digital gold, a store of value, and a safe haven.
The Fed’s all-in easing strategy
The Federal Reserve (Fed) is currently in a difficult position. They have increased interest rates so much that many banks across the world are now in a bad spot. With an endless number of banks globally holding US Treasuries, the risk is that if they start dumping them, the price will decrease even more, and more banks will be in trouble. The Fed cannot raise interest rates any further, but they still may do so for a few more times to show they are “still the boss.” Meanwhile, they are setting up all kinds of liquidity lines across the world to ensure the banks are supported.
The Insane Run of Bitcoin
Bitcoin’s run is currently at an all-time high, with a reversal pattern forming on the weekly scale. While it is entering a new phase, Bitcoin’s win is shaking the crypto market. This digital gold and store of value has been regarded as a safe haven amidst the global financial situation.
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The Current Scenario
The situation of banks collapsing across the world is causing chaos. The Fed is intervening to support global banks and prevent dumping of treasuries. The narrative of Bitcoin being a digital gold store of value safe haven is finally corresponding to the worldwide events and price.