The leading cryptocurrency bitcoin hit its seven-week on Thursday when its price jumped over 4.98% and reached at $9,233. The upward moment in the price of bitcoin came after the US Federal Reserve warned of a medium-term economic disaster caused by the ongoing coronavirus pandemic. Bitcoin is up by more than 30% in the last seven days as halvening even approaches. US Fed Chairman Jerome Powell had said that he expects the US economy to shrink further.
US Federal Reserve hints at more stimulus.
US Fed chairman Jerome Powell said in a press brief on Wednesday that he expects the economy to shrink further on three factors, including the uncertain virus curve, loss of productive capacity due to social distancing, and the crisis’ global dimension. The Federal Open Market Committee noted that the Fed would act “forcefully, proactively and aggressively” to safeguard the US economy. The Fed would keep interest rates near March 15 levels, between 0 and 0.25%, until the US economy achieves its “maximum employment and price stability goals.” The US has been the hardest-hit country with the coronavirus as over one million people have been infected with the virus, and over 61,000 people have died so far.
Bitcoin sees a positive momentum as halvening event approaches.
At the time of writing, the price of bitcoin is changing hands at just above $9,500, up around 20% in the last 24 hours. The CSO of blockchain technology firm Blockstream, Samson Mow, believes that the cryptocurrency had more solid reasons to grow other than artificial inflation caused by the US Federal Reserve’s dovish policies to revive the economy. He said that the bitcoin draw higher demand from traders ahead of its mining reward halving on May 12, 2020.
Currently, the reward for mining each block is 12.5 BTC, but post halvening it would be reduced to 6.25 BTC. The halvening event will send the bitcoin’s daily production down from 1,800 BTC to 900 BTC, which is quite ironic as US Fed prepares to print more and more dollars.
