Bitcoin is up some 5% today as the FED announced they would be expanding their Balance Sheet
The FED announced late yesterday that they would be resuming their treasury securities purchases.
However, they were quick to note that this would not be the same thing as Quantitative Easing.
Or more commonly known as "QE".
How it's different than QE is beyond me, but the FED Chair was quick to mention that this program would not be the same:
“I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis. Neither the recent technical issues nor the purchases of Treasury bills we are contemplating to resolve them should materially affect the stance of monetary policy.”
Either way, we have a FED balance sheet that is expanding for the first time since 2013
The FED's balance sheet had been decreasing the past several years, and hasn't been increasing since 2013.
Check it out:
Whether bitcoin bounced specifically because of this news is of course debatable, as the timing of the bounce doesn't match up perfectly.
However, being that the bitcoin market is an immature market still, sometimes news doesn't impact prices as quickly as it does in other markets.
Some thoughts
My bet is that bitcoin is going up because the FED is going to be starting up a program that is very similar to QE, a program that historically has inflated asset prices.
This is exactly why and how bitcoin works as a store of value.
With interest rates dropping, and the FED's balance sheet expanding, there is a very favorable macro environment for bitcoin gains.
Couple that with the halving now only 7 months away and we have all the right ingredients for a major move in bitcoin in the near future.
Stay informed my friends.
-Doc