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Bitcoin stabilized after the Bank of England unexpectedly lowered interest rates to an 11-year low

Bitcoin stabilized after the Bank of England unexpectedly cut interest rates to the lowest level in 11 years

On March 11, the United Kingdom Central Bank unexpectedly cut interest rates – the strongest since 2009, a move that took place after the US Federal Reserve (Fed) took similar action a while ago. Not for long.

According to the Financial Times reporting On March 11, the Bank of England (BoE) said the move was aimed at limiting the negative impact of the corona virus pandemic on the economy.

The UK aims to support belief

In a statement, BoE said:

"Lowering bank interest rates will help support the confidence of businesses and consumers in difficult times, thereby boosting cash flow of businesses and households, reducing costs and improving financial ability. just. “

This move has brought the target of bank interest rates from 0.75% to 0.25%. While the Fed's interest rate is currently 1.25%, with many forecasts continuing to cut this year.

After BoE announced the decision, the pound rate immediately reacted, down 0.5% against the US dollar, but then rebounded – currently at $ 1.2869 per 1 pound. .

Meanwhile, Bitcoin (BTC) did not have any reaction to this event, supporters of the king said that stimulating spending and borrowing by lowering interest rates is just a fact of the foundation. for long-term destruction to the fiat economy.

To avoid recession – a key fear of Keynesian economies, governments aim to increase spending and apply incentives such as interest rate cuts to businesses.

Additional spending in the context of less income can only occur through the use of measures such as increasing sources of money and money, further reducing the value of fiat currencies.

Bollinger: The safe BTC shelter is “psychological”

However, Bitcoin's lackluster response to the COVID-19 crisis surprised many. Among them is John Bollinger – author of the Bollinger band trading index, who announced on Tuesday that the recent losses are surprising.

"Bitcoin has fallen victim to the COVID-19 chaos. I really don't see that in the near future, it can act as a safe haven asset, "he wrote on. Twitter.

In one pretty postc, he adds:

"Safe hiding is a matter of awareness, not reality. If an asset is considered a safe haven, it is so. The problem is completely psychological. "

The BTC / USD pair is trading at $ 7,870 at press time, down 0.4% on the day after rising sharply above $ 8,000.

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According to CoinTelegraph
Translated by ToiYeuBitcoin

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