BitOffer Institute: Unlimited QE Announced by FED, Fuse to the Buls?
On March 23, FED launched a series of new asset purchase plans (including open asset purchase) to purchase unlimitedly government securities and MBS from the market as per demands in order to support economic development during COVID-19 breakout and a smooth market operation. FED’s placing almost all up bet and limitless QE show the US government’s obvious desire to bailout. Stimulated by the limitless QE plan, global stock markets rebounded collectively. On March 24, US stocks rose more than 11%, the highest single-day increase since 1933, and gold, crude oil and bitcoin market all rebounded sharply.
Chief analyst Lucian in BitOffer believes that Fed’s limitless QE model is the result of learning the lessons from the 2008 financial crisis. However, although this model can avoid further panic in the financial market to a certain extent, the financial market will not fall into a panic selling and the market liquidity crisis will be eased, it still could not save the US economy that is about to decline. Moreover, as it will take a longer time for America to prevent and control COVID-19 than expected, the signals of financial risks and the real economic recession will be amplified.
Due to the rapid spread of epidemics in Europe and the United States, coupled with the plunge in international crude oil prices, the overall market is extremely pessimistic. Over the past month, global stock markets have plummeted and showed a unilateral downward trend, and US stocks have completely entered into a bear market. There was in total five circuit breakers in the US stock market history, but the past month witnessed 4 times. The famous investment master Buffett said that the current market was even worse than that in 2008.
Affected by the epidemic recently, global traditional assets have plummeted collectively, and Bitcoin, known as “digital gold”, also suffered, falling from 9,000 US dollars to 3,800 US dollars, a short-term decline of more than 50%, which is a halving of price. Many investors now begin to question whether Bitcoin can survive it and whether it has a bull market after output reduction this year. In fact, viewing from the mid-long term, after a short-term plunge, the current Bitcoin price is very attractive and maybe the starting point for the next bull market.
Bitcoin Better than ETF?
As is known to all, bitcoin output was reduced in this May. This means that its mining output is halved, which will lead to a doubled price theoretically; the mining machine replacement will yield cost, which will also lead to a doubled price theoretically. In addition, as the Bitcoin miner’s hashrate is upgraded, Bitcoin will be mined undoubtedly and the mining difficulty will be reduced significantly. Then, the Bitcoin price will be multiplied by at least 4 times after output reduction. Based on the current Bitcoin price of 6,500 US dollars, Bitcoin is expected to rise to over 26,000 US dollars next year.
If you buy and hold bitcoins now, you will get 4 times the return after bitcoin price really rises to 26,000 US dollars after output reduction. However, if you buy Bitcoin ETF launched by BitOffer, as it uses intelligent dynamic warehouse adjustment mechanism and compounding calculation, the maximum return can be more than 15 times. For investors who like to invest in Bitcoin, Bitcoin ETF does have more advantages. Bitcoin and Bitcoin ETF are transacted in the same model, which can be bought and sold at any time, but the returns of Bitcoin FTE are 3 times higher than Bitcoins now. Therefore, the Bitcoin ETF now also attracts wide attention from investors.
