ADVERTISEMENT

Bitcoin bull outlines 7 steps to more fiscal stimulus and higher BTC prices

  • July 29, 2021
  • YASHU GOLA
  • 61

Bitcoin's drop below $30,000 has sparked worries that it is heading to $20,000 next, but is such a massive drop feasible against the backdrop of current macro fundamentals?

A recent sell-off in the Bitcoin (BTC) market pushed its prices below the key psychological support of $30,000.

While the cryptocurrency's move downhill prompted many analysts, including Luno exchange's Vijay Nayyar and Kinetic Capital's Jehan Chu, to predict a further depressive move below $25,000, Anthony Pompliano offered a contrasting bullish outlook.

The Morgan Creek Digital Assets founder pitted risk-on markets against the fears of the fast-spreading Delta variant of COVID-19. He noted that governments, on the whole, would introduce "more aggressive monetary stimulus" programs should the new coronavirus strain spread at the scale of its Alpha version.

"History is not necessarily an indicator of the future, but it is hard to imagine a scenario where if we had a second wave of lockdowns, we wouldn’t also get more aggressive monetary stimulus efforts," Pompliano wrote in a newsletter.

"If that occurred, we would likely see all assets continue to go higher and higher."

In saying so, Pompliano envisioned that the road to more dollar liquidity would like come in seven successive stages, as shown in the snapshot below:


The seven potential stages ahead as the new Delta variant clouds recovery hopes. Source: Anthony Pompliano Newsletter

Risk-on FOMO expected

Pompliano's statements appeared as the Bitcoin market fell in sync with other risk-on assets across the globe on July 2.

For instance, all three Wall Street indexes — the S&P 500, the Nasdaq Composite and the Dow Jones Industrial Average — logged their steepest declines in weeks. Also, gold fell to as low as $1,795.12 an ounce but later recovered to $1,812.145 an ounce.

Bitcoin slipped in tandem with the U.S. equity market on July 20. Source: TradingView

Meanwhile, United States government bonds rallied alongside the dollar, showing that investors are heading for safe-havens amid the global market turmoil.

Behind the rout, global media outlets reported, was a growing list of worries about economic recovery. The Delta variant of COVID-19 has spread rapidly, reigniting the dialogue in several countries about whether authorities should reimpose lockdown and curb economic activity.

"The hope was that [COVID-19] vaccines would provide us with the endgame," Mohammed Kazmi, a portfolio manager at Union Bancaire Privee, told the Financial Times. "Now investors are looking at the UK and there’s a bit of fear with regards to reopening so aggressively when cases are still so high."

Kazmi added that markets are now stepping back from hopes of a V-shaped recovery and are feeling uncertain about the future of their economies.

Pompliano's comments also appeared as the Federal Reserve flirted with the idea of hiking its near-zero lending rates by the end of 2023 to curb rising inflation.

Additionally, several central bank officials also favored the idea of tapering their aggressive $120 billion per month asset purchase program, although Fed Chairman Jerome Powell clarified that the Fed intends to run the quantitative easing policy hot until the U.S. economy recovers completely.

James Wo, founder and chief executive officer of global blockchain and digital asset investment firm Digital Finance Group also noted that even though the Bitcoin industry has encountered downside volatility during this current market cycle, the fundamentals that have driven the value of its and other markets higher all across 2020 continue unaffected. He added:

"Any combination of narratives that have brought digital assets to this discounted price can be checked off of lists of FUD that would have eventually affected the price of the whole market."


Source: Cointelgeraph

Disclaimer

The views expressed in this article are the author's own and do not necessarily reflect the view of News-crypto.News-crypto shall not be held liable under any circumstances for any losses, damages or expenses arising from the use of any content mentioned in this article.

The information contained on this website is provided for informational purposes only, with no warranties, or guarantees made as to the accuracy, completeness or timeliness of it. News-crypto assumes no liability or responsibility for any errors or omissions in the information contained on this site. We strongly encourage you to conduct your own research before taking any action.

This site may contain copyrighted material, the use of which has not always been specifically authorized by the copyright owner. If you wish to use the copyrighted material from this site for the purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. Authors or publishers who claim ownership of copyrighted articles reprinted on this website and wish for the content to be removed may email us directly at news-crypto@gmail.com

If you would like to connect with us about any of the distributed content or other inquiries, please email us at news-crypto@gmail.com with the relevant documentation.


ADVERTISEMENT

IMG

×