Fed Chair Jerome Powell recently threw cold water on hopes for another round of quantitative easing (QE). He made it clear that QE is only used when interest rates are already at zero, and that the Fed is a long way from ending its current quantitative tightening (QT) program. This statement directly challenges the idea that a quick shift to easy monetary policy would boost Bitcoin and the crypto market, as it has in the past.
Experts Weigh In: Is QE Necessary for Bitcoin’s Growth?
Several analysts have shared their thoughts on Powell’s announcement and its implications for Bitcoin:
- Macro analyst Alex Krüger: Believes we’re far from seeing QE.
- Commentator Tagoo: Suggests ending QT is more important than starting QE. Krüger agrees, but thinks it will take a few more months for QT to wind down.
- Felix Jauvin (On the Margin podcast): Doesn’t think QE is coming anytime soon. He believes the US economy is in a healthier growth phase and that bull markets are possible without the need for artificial monetary stimulus. He sees this as a positive, productivity-driven environment.
- Dan McArdle: Points out that markets can remain bullish even with a healthy economy and some credit expansion. He warns against relying solely on zero-interest-rate policies and QE.
- Julien Bittel (Global Macro Investor): Argues that the Fed’s actions are only one piece of the global liquidity puzzle. Other factors, like actions by the Chinese central bank or private credit creation, can also impact markets. He points out that even with QT in 2017, Bitcoin still saw significant growth.
The Bigger Picture: Beyond the Fed
The overall consensus seems to be that while the Fed’s stance is important, it’s not the only factor influencing Bitcoin’s price. Other global economic forces and liquidity injections could still fuel growth. The possibility of China implementing its own form of QE is also a factor to consider.
Altcoin Season Uncertain
Some analysts, like Kevin, believe Bitcoin doesn’t need QE to thrive. However, he notes that we’ve never seen a major Bitcoin market peak during active QT, suggesting a robust altcoin season is unlikely in the near future. He still anticipates the current cycle ending sometime in Q2, but Powell’s comments cast doubt on the predictions of those who’ve been expecting an altcoin boom.
At the time of writing, Bitcoin was trading at $96,334.
