On Wednesday, the US Federal Reserve decided to leave its comparison of the interest rate unchanged in the range of 4.25% -4.5% – and Bitcoin reacted immediately. The detention, although widely expected, was associated with slightly changed perspectives that include a slower schedule of future rates and noteworthy adjustment of the rate of reduction of the central bank balance sheet.

According to the Federal Open Market Committee (FOMC) statement, “Dot plot” Fed now indicates only two 25 interest rate discounts this year-for many market participants expected in December. Decision -makers emphasized that although interest rates remain on a restrictive territory, the time of actual cuts depends on the path of economic indicators, especially inflation and employment.

However, the latest statement does not claim that inflation and employment are “in balance”, reflecting the growing concern of the Committee for economic uncertainty. Perhaps, however, the most essential turn was the Fed announcement that it would tardy down the reduction of bond resources, commonly known as “quantitative tightening” (QT).

Starting from April, a monthly rafting of government bonds will drop from $ 25 billion to $ 5 billion – a significant reduction, which many analysts consider a prelude to a more accommodating position, if the economic or market conditions have deteriorated.

What does this mean for bitcoins

Shortly after the announcement, Fed Bitcoin collected about 4-5%, briefly exceeding USD 86,000. NIK BHATIA – Founder of Bitcoin Layer and author of Bitcoin Age – was to his latest Video update analyze the implications of decisions. “Bitcoin increased by 4% in the news that the Fed slows down QT and is still involved in lowering interest rates,” Bhatia said at the beginning of its analysis, noting that the market was focused on laser or the central bank will modify its approach to quantitative tightening.

Bhatia explained how a reduction in a monthly outflow limit from $ 25 billion can loosen the liquidity restrictions in the general system: “Now the Fed is still shrinking the balance, but now it will do it by only five billion a month, as opposed to 25 billion a month, and this is a significant change.”

“This is not a bit:” Hey, we are now on the border of QE, because we went from 25 to five “, but the first step is to get a balance to stop shrinking … so that if Fed had to turn around, it can quickly go from 5 billion in QT per month to some small extension.”

Bhatia emphasized that such a movement can be an appetite for the risk of fuel: “The market sees the Fed about what it is: supports the creation of loans that extends the balance around the world, and this flow ends in assets prices … Some of these assets can be shares, Bitcoin -[and] Other financial assets. “

Other experts are even more drastic in their opinion. Co -founder of Bitmex Arthur Hayes It was found Via x: “delivered Jaypow, QT basically by April 1. The next thing that we must be thrown out for Realz is either release from SLR, and or restart qe.

Jamie Coutts, main cryptographic analyst at Realvision, almost That’s right: “After last night, QT is effectively dead (for some time). Treasury variability has supported immediately and now reflects the decrease in DXY of this month. It is all extremely additional.”

In the Bitcoin press he traded at USD 85,881.

A distinguished painting created from Dall.e, chart from tradingview.com