‘This is not a Drill’, Says Bitcoin Perma Bull Pompliano on Fed’s Emergency Push

Bitcoin [BTC] price currently stands at the risk of a deflationary crisis. The US Feds announces extreme QE measures in the face of violent spread of Coronavirus.

The benchmark rates have been reduced 0%, moreover, it also adds $700 of QE funds to the system as well. This is in addition to the $1.5 trillion added during the last week. The emergency measures announced by the FED have now thrown the economy to the brink of a depression.

The last time the Fed did an emergency rate cut was during the 2008 financial crisis.

Over the last two weeks, they did two separate emergency rate cuts that totaled 1.5% and brought us to 0% interest rates.

This is not a drill. These are unprecedented actions by the Fed.

— Pomp ? (@APompliano) March 16, 2020

Stock Markets Continue to Plummet

After brief shutdowns last week, the CME futures market yesterday enabled another “lower limit” fail safe levels by limiting the plunge in stock to less than 5%. S&P 500 index is now at a 25% low from ATH attained in February.

The SPX futures index plunges by 3.62% trading around $2550, with the prices for June and September futures contract trading even lower.

Lately, Bitcoin [BTC] price has been following stocks closely, trading as a risk asset under a massive sell-off in the traditional markets. Despite the QE measures, the futures market is continually dropping. Hence, it is highly alarming for both, long and short term view of Bitcoin.

Cash in King

The affected areas US is at the threshold of a lock-down equivalent to Wuhan in the China earlier this year. The hospitality business is already looking down at a 4-6 weeks restriction with only take-out options.

JUST IN: Los Angeles bars and cafes to close, with restaurants limited to takeout options.

— The Spectator Index (@spectatorindex) March 16, 2020

In the current, environment all assets are likely to see larger sell-off to cash positions.

The imminent catastrophe in the global markets threatens drops of extreme proportions in BTC as well. Nevertheless, many would argue that BTC was created for times like these to address such extremes economic downturns.

Moreover, it also has a global factor which could find buying support from other regions. Dovey Wan, a crypto analyst and founding partner at Primitive Crypto notifies of spot premiums in China. She tweeted,

First time I’ve seen such big Chinese OTC premium during a technically Bitcoin bear market This can be part of the new paradigm

Moreover, as things are starting to return to normal in China, the dominance of the mining sector in the region will keep the supply intact. However, the demand might see a reduction if emergency continues to breach threshold levels.

Do you think Bitcoin could fall to three digits or hold the long-term bullish outlook? Please share your views with us.