Calls for Bitcoin Rally Grow as Britain Considers Negative Interest Rates
According to a Telegraph exclusive published late Wednesday, the central bank is currently in the midst of a review of how negative rates could function in Britain. While a Reuters poll of economists shows a less likelihood of below-zero lending charges, Telegraph reports that they could come in the BoE’s November monetary policy decision.
“Interest rates literally have no choice but to keep drifting lower as long as the world remains 0T deep in debt,” he wrote followed by a colorful Bitcoin hashtag.
Earlier this week, the Reserve Bank of Australia also slashed its lending rates to near-zero while announcing further quantitive easing. The European Central Bank is maintaining a below-zero rate policy since 2014.
Bullish on #Bitcoin https://t.co/prCT6XL51s
Bitcoin’s market capitalization grew from .5 billion to 9.89 billion between March and November.
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Bitcoin reached a three-year high above ,000 in October 2020 amid a low-interest environment in 2020.
Analysts Canterin Clark and Lark Davish tweeted that they expect Bitcoin to grow further if the BoE news is accurate.
Bitcoin performance against the pound in 2020. Source: BTCGBP on TradingView.com
The expansionary policies could put downward pressure on the pound and pound-denominated financial instruments. Their medium- to long-term outlook makes diversification into Bitcoin and other hedging assets more appealing to investors.
England has entered the second lockdown this week after experiencing a dramatic spike in coronavirus infections.
Telegraph also reported that the UK Finance Minister would introduce additional economic measures to aid citizens through the coronavirus pandemic’s financial aftermath. That includes paying 80 percent of the wages to the workers that were furloughed due to the first lockdown.
Alex Saunders, the CEO & Founder of Nugget News AU, pushed the bullish Bitcoin narrative forward in his early Thursday tweet, stating the BoE and other central banks like it would need to push interest rates below zero.
Away from the Bitcoin market, Standard Chartered Precious Metals Analyst Suki Cooper also predicted a Negative Interest Rate environment in the US. Her forecast concerned gold, another safe-haven asset that, like Bitcoin, surged incredibly high between March and October.
Gold Cues Bitcoin
“Gold prices would likely test levels beyond the previous intraday high of ,920/oz [back in 2011], as negative interest rates would lower the opportunity cost of holding gold,” Ms. Cooper explained. “Investors still appear to be under-allocated to gold, and negative rates could draw interest from retail to the official sector.”
— Cantering Clark (@CanteringClark) November 4, 2020
Bitcoin traders have increased their bullish outlook on the cryptocurrency as the Bank of England reportedly considers moving into negative interest rates.
The cryptocurrency’s rally started after the Federal Reserve decided to cut lending rates to near-zero in March. Coupled with an unlimited debt-buying policy, the US central bank sent bond yields in poor shape, prompting investors to seek profits in the riskier markets.
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