Cryptos Could Benefit From Fed’s QE Buying Spree

by Marvin Dumont

From March 11–13, the cryptocurrency industry went from $224 billion to $123 billion in market cap, shedding 45% of value in 48 hours. At $188 billion, the market has recovered some of those losses.

Apollo (APL) is up 11.5% over the past 24 hours.

There could be brighter days ahead for crypto investors as the Federal Reserve announced Monday a plan for unlimited quantitative easing (QE). Its goal is to stem the effects of coronavirus pandemic on the U.S. economy.

The new QE buying spree would supplement the White House’s proposed $2 trillion stimulus package being considered by Congress. The Fed’s actions are designed to inject massive liquidity into the U.S. financial markets and global economy, but could also add some liquidity to the crypto market (and therefore raise valuations).

According to Reuters:

[The Fed] previously announced it would buy at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities.

Now it looks like the amounts involved will be even greater. Unlimited QE brings expansionary monetary policy to unprecedented territory where financial and consumer markets will be flooded with cheap, newly-created dollars. That means bonds around the world, including Europe and Japan, will continue to have negative rates.

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