Global economic markets are failing worldwide and they are struggling to stimulate any positive growth.
With increasing radical policies and ongoing weakening of national currencies, Bitcoin is fast becoming more and more appealing, and so it should be.
Central Banks Are Promoting Cryptos Unintentionally
Central banks on a global scale are cutting interest rates, and without even meaning to, they are pushing people towards cryptocurrencies.
The US central bank has recently slashed interest rates, with the Federal Reserve lowering its benchmark rate by 50 basis points. They are not alone, the Australia’s central bank has too lowered their benchmark cash rate by 25 basis points to a record low of 0.50 percent.
European banks have been struggling with a low interest rate economic environment for a number of years, first hitting zero in 2012, and then turning to a negative in 2014.
In September 2019, the European central bank yet again pushed down interest rates again with countries such as Denmark, Sweden and Japan following suit.
Eswar Prasad, Cornell University Professor, responded in an interview with CNBC, saying,
“Persistent reliance on ultra-low or negative policy interest rates leaves financial systems ever more vulnerable and has little positive impact on growth.”
Wealthiest Investors Shifting Their Mindset on Crypto’s
Coinbase CEO, Brian Armstrong believes that crypto markets will continue to greatly benefit from the central banks aggressively cutting interest rates and being unable to sustain and stimulate growth within their economic markets, he commented in a recent tweet,
“A down stock market and interest rate cuts may lead to growth in crypto this year. Governments around the world are likely to look to stimulate the economy in any way they can, including using quantitative easing and expanding the money supply (printing money).”
In a subsequent tweet, Armstrong also touched on the recent Chinese liquidity injection of around $173 billion. Suggesting tat this could influence a major shift in the mindset of many people globally, including the world’s largest and wealthiest investors.
“This could be the year where the mindset of institutional investors begins to shift, from crypto as a venture bet, to crypto as a reserve currency.”