- The Fed’s decision to expand its balance sheet is seen as a long-term positive development for bitcoin by crypto market experts.
- Short-term technical charts has signaled a bullish move to the 200-day moving average, currently just above $8,600.
- Speculation that SEC might approve ETF application by Bitwise is fueling optimism that more investors could allocate funds to the cryptocurrency.
Bitcoin (BTC) jumped 5.9 percent on Wednesday to the highest price in three weeks, after the Federal Reserve (Fed) said it would print money to expand the size of bank reserves — seen as a move by the U.S. central bank that could spark inflation.
The top cryptocurrency surged to $8,649.13 as of 18:22 UTC time (2:22 p.m. New York time), according to CoinDesk’s Bitcoin Price Index.
Bitcoin suffered a steep drop in late September, tumbling from above $10,000, a move analysts attributed to big margin calls on the Bitmex exchange and disappointment over the debut of a new futures contract on the Intercontinental Exchange’s Bakkt digital-asset trading platform.
During the monthly futures contract’s first week of trading, it managed to garner just $5 million of total volume, disappointing industry observers who had anticipated a higher uptake from big institutional investors.
But on Tuesday, Federal Reserve Chair Jerome Powell said the central bank will soon start expanding its balance sheet again in an effort to avoid a repeat of the recent turmoil in the money markets. Powell said the Fed may have to keep pumping money into the financial markets by buying securities in the coming days in order to ensure the smooth functioning of short-term lending markets.