When the cat is away, the mice come out to play.
As the global economy is muddled with concerns surrounding trade wars, interest rate movements, and global governance dilemmas, the cryptocurrency world is enjoying a parabolic move. Over the past few months, traditional finance has slumped, while Bitcoin has surged by 200 percent.
With many analysts pointing to various internal reasons as a source or even as a catalyst for this drive in price, the answer may instead lie externally.
Fresh from his ‘Tangle in Taipei,’ Arthur Hayes, CEO of BitMEX, the futures-centric cryptocurrency exchange, looked to the banking elite and their macro-economic functions as providing a boost to the cryptocurrency industry.
In a recent interview with Ran NeuNer of CNBC CryptoTrader, Hayes mulled the prospect of a Bitcoin breakout over its December 2017 all-time-high, while pointing to the monetary policies of the globe’s largest economies as being the ‘main driver.’
“One of the major trends I see driving this [the Bitcoin parabolic move] is Central Bank money printing.”
Three key inklings of this Central Bank-driven Bitcoin price rally will likely come from the United States, the European Central Bank [ECB] and the People’s Bank of China [PBoC].
According to Reuters, the Federal Reserve could announce a cut in interest rates in late July, in reaction to the US-China trade war. The current interest rate of 2.25 percent was set in December 2018, with the Fed stating that 2019 could see an increase by 25 basis points.
Hayes also veered towards the PBoC’s reserve requirement ratio [RRR] cuts, in order to bolster the economy in the face of the aforementioned east-west trade war. Many Chinese analysts have suggested that the “speedy RRR cut” is a sign of the determination of sovereign administrators to push growth.