Dollar given by the American government is even used to buy Bitcoin.
If I told you earlier in the year that the United States would give checks for more than $ 1,000 to all citizens and that many of them would buy Bitcoin for that amount, you would have laughed in my face. But now, lo and behold, Bitcoin, in the western Atlantic, is being “sponsored” by the Federal Reserve (FED), the American central bank.
With the pandemic underway causing an economic meltdown resulting in an inevitable recession, central banks around the world have been engaging in a loose monetary policy to boost their economy. Chief among these is the United States Federal Reserve.
Last month, the FED announced a series of “emergency” interest rate cuts, printed billions of dollars and started a retail stimulus program. With enough time for the effects of the ‘dollars in abundance’ program, the result is a “sponsorship” for Bitcoin, both on the institutional and retail side.
In the United States, the main inflow of Bitcoin from dollar sources in the institutional sector is through the Bitcoin futures contracts of the Chicago Mercantile Exchange [CME], which curiously saw an average of more than 6,000 contracts traded per day in 2019. CME plummeted on March 12 along with the crypto market, then found itself once again, since the amount of open and pending positions, or outstanding interest [OI], at the exchange, went back to his days before plumb.
On March 12, CME saw an average for its Bitcoin futures at $ 171 million, which a few days after the BTC liquidation fell to $ 107 million, its lowest point in the past 12 months. This was a result of the need for money, resulting in the sale of highly liquid assets like Bitcoin and gold, due to the greater perception of Bitcoin as a risky asset, the settlement and recovery of the cryptocurrency was greater than the commodity.
However, since the fall, Bitcoin’s price has rebounded by more than $ 1,200, rising above $ 7,000 on April 16, for the first time since the fall. This price recovery caused an increase for CME, which rose from the aforementioned minimum to $ 208 million yesterday. This is the largest number of outstanding positions in the exchange in more than a month.
In addition, the CME revival contrasts sharply with the rest of the Bitcoin futures market. BitMEX and OKEx, which hold the highest open positions in the unregulated Bitcoin derivatives market, have had much lower recoveries. For example, after the fall BitMEX stood at $ 530 million [abaixo dos US $ 1,2 bilhão] and, at the moment, the exchange accumulates a value of $ 597 million, meaning only a 19% increase from its low after the fall in the price of Bitcoin.
Another indication of the U.S. government’s decision to issue a stimulus program focused on retail in order to leverage consumer spending, it seems, has resulted in a stimulus for Bitcoin.
Coinbase, the San Francisco cryptocurrency exchange has seen a significant amount of purchase deposits that are, coincidentally, the same amount as the $ 1,200 stimulus check issued by the Federal Reserve. Brian Armstrong, CEO of the exchange, posted on Twitter,
– Brian Armstrong (@brian_armstrong) April 16, 2020