Federal Reserve (USA) to Announce Rate Decision: What Would the Impact Be on Bitcoin (BTC)?


The Federal Reserve’s December rate decision is expected to be announced next Wednesday. While the latest policy interest rate decision of 2020 will help Bitcoin’s upward trend, it could further shake the support of the US dollar.

At Tuesday November’s meeting, the central bank could leave policy interest rates at 0-0.25 per cent, the same as in November, and decide to keep interest rates at that level until maximum employment and inflation above 2 per cent are achieved.

The market also does not expect any changes to the guidance on the Fed’s asset purchase program. The central bank currently buys $ 80 billion in Treasury bonds and $ 40 billion in mortgage-backed securities each month. Officials have pledged to continue buying debt at the current pace in the coming months.

What happens to bitcoin (BTC)?
The combination of very low interest rates and unlimited bond buying tends to benefit Bitcoin. The leading cryptocurrency has risen 400% to date from its lowest level in mid-March in the face of such policies. Because they have made holding the U.S. dollar and lower-yielding short-term Treasury bonds less attractive to investors.

The environment is literally available for Bitcoin to emerge as a safe haven. Mainstream institutions including publicly traded firm MicroStrategy, payments company Square and veteran insurance company MassMutual have invested hundreds of millions of dollars in cryptocurrency as an anti-fiat measure.

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