As the globe faces what looks to be a looming recession of monumental levels amid the Covid-19 outbreak efforts have been made by central banks to try and alleviate such pressures. One of the biggest policies that has been implemented, especially by the US’s Federal Reserve, has been the creation of new money.
Federal money printing has reached unprecedented levels with one suggestion from the association suggesting that they can print infinite money. This policy will certainly help the economy in some sense, as it will provide a supply of capital, but it also has many negative consequences that the Bitcoin community has been quick to jump upon.
Part of the reason that the Bitcoin community is so anti printing money is that one of the core values that bitcoin has is to be anti-inflationary with its set 21 million coins. This printing of money will lead to inflation and the debasement of the US dollar.
Money printing disease
In fact, some of the community have not only criticised the money printing, but they have also outlined Bitcoin’s role in providing an alternative for those who are worried about the ramifications of printing money at this level.
Tyler Winklevoss, Co-Founder and CEO of digital asset exchange Gemini, has gone as far as to call Bitcoin a “vaccine” for the “money printing disease.”
The Fed is hoping that it can provide liquidity to businesses who need it at this time, but by printing money to do this, they are creating other problems which are also being exacerbated by lowered Federal interest Rates.
The Fed Chairman Jerome Powell said in an interview with NBC’s “TODAY” program that the US. central banks will continue to provide liquidity to businesses that need it:
“When it comes to this lending, we’re not going to run out of ammunition, that doesn’t happen. We still have policy room in other dimensions to support the economy.”
Bitcoin as a hedge
With the centralized forces in control of the money situation, Bitcoin supporters have called for the coin to be a hedge against such policies.
“BREAKING: FED CUTS RATES AGAIN. Mad money printing is only starting. They will print trillions in the coming months#Bitcoin is THE ONLY solution..” Anthony Pompliano (aka “Pomp”), Co-founder and Partner at crypto-focused investment firm Morgan Creek Digital Assets, tweeted.
“#Bitcoin isn’t a safe haven from pandemics. It’s a safe haven from fiat and Fed money printing. Time to buy,” Samson Mow added.