Morgan Creek Digital Assets co-founder Anthony Pompliano says the European Central Bank’s expected dovish turn will be “rocket fuel” for Bitcoin price.
Morgan Creek Digital Assets co-founder Anthony Pompliano says the European Central Bank (ECB)’s expected dovish turn will be “rocket fuel” for Bitcoin.
In a tweet posted on July 26, Pompliano commented on a fresh Bloomberg article investigating the ECB’s imminent policy moves — potentially including interest-rate cuts and renewed quantitative easing — designed to boost a faltering Eurozone economy. He said:
“ROCKET FUEL: They’re going to cut rates and print money right as we march towards the Bitcoin halving. Buckle up. This will be wild 🚀”
Pompliano had notably recently cited bitcoin’s halving — the reduction of mining rewards in half in May 2020 — as being one of the largest drivers of Bitcoin’s predicted price appreciation. His forecast is that the coin will hit $100,000 by the end of 2021.
Bloomberg’s article cited ECB President Mario Draghi’s recent comments indicating the institution’s intent to deliver another round of monetary stimulus this September. Notably, the ECB head stated that “on the inflation front, we don’t like what we are seeing […] That’s very important.”
Central bankers, Eurozone woes
The ECB president said he anticipates that contractions in Euro area manufacturing could contaminate the services sector, in part due to global trade tensions. While dismissing the prospect of a broad recession, he stated that consumer-price growth had fallen short of the ECB’s goal of just below 2% — justifying calls for significant support.
The ECB’s Governing Council has also added a crucial line to its “commitment to symmetry” statement, which Bloomberg notes reflects an openness to prolong stimulus to elevate price growth for some time:
“The Governing Council has tasked the relevant Eurosystem Committees with examining options, including ways to reinforce its forward guidance on policy rates, mitigating measures, such as the design of a tiered system for reserve remuneration, and options for the size and composition of potential new net asset purchases.”
One Danske Bank economist told Bloomberg he expects 20 basis points of rate cuts from the ECB and more QE, adding: “It’s a matter of when and how ECB will act, no longer if.”
The United States Federal Reserve is meanwhile expected to cut interest rates next week, while Turkey has just introduced the biggest interest-rate cut since at least 2002. Across the globe, Australia’s central bank has also signalled it is likely to further ease policy.
As recently reported, the head of global fundamental credit strategy at Deutsche Bank has remarked that central banks’ dovish policies are positively impacting “alternative” currencies such as bitcoin while hurting investment banks.
Source: Cointelegraph https://cointelegraph.com/