Revised Interest Rate and Increase in Inflation. Powell said that they gave room for more than 2% inflation because the economy is currently in a bad state and the changes will promote heightened money printing.
It is a part of quantitative easing. It will pave the way for bond repos as well. Garlinghouse believes that the benefit of this inflation will be good for the cryptocurrency industry long-term. This isn’t just going to be good for XRP but for Bitcoin and other cryptocurrencies as well. In his words;
“The pandemic is throwing so many playbooks out the window… yesterday’s action flies in the face of decades of precedent. Signs point to the further dollar debasement in the near term (leading to further diversification of assets which will certainly be good for crypto).”
The primary feature that drives value to cryptocurrencies is scarcity. This is what makes them a great alternative to the United States Dollars. The Feds take steps to allow more than 2% inflation, the value of the USD will drop annually at a pace that the United States has never experienced. Investors who want to preserve their capital will withdraw their money from the bank and purchase other assets of higher value or with the potential to rise.
It’s true that cryptocurrencies are highly volatile but they still have the potential to rise significantly within a short time and that’s much better than having the value of your hardearned cash drop while it’s in the bank. It’s still important to note that many investors still don’t have a lot of faith in cryptocurrencies. It’s not going to be a rapid increase. It will be slow and steady but these cryptocurrencies will eventually reach global adoption.
Almost throughout the week, the XRP token has been bearish against the USD. The significant decline in price started long before Bitcoin BTC pulled back but Bitcoin made things worst for XRP.
The token fell to the support at $0.2600 but the bulls were able to hold the line. This morning, XRP was trading at $0.274089. This means it is up by 2.04% against the USD and up by 1.82% against Bitcoin BTC. The trading volume over 24 hours was $1,120,934,704 and the market capitalization was $12,332,606,928.
Max writes about blockchain projects and regulation with a special focus on United States and China. He joined Smarterum after years of writing for various media outlets.
- Ripple Brad Garlinghouse Talks About Revised Interest Rates by the Feds
- Economic Problems in the General Market Directly Influences The Diversification of Cryptocurrencies
- Ripple XRP Manages to Move Above the $0.2700 Level
The global economy is going through a tough time right now as the Ripple effect of the Coronavirus continues to spread. Yesterday, the United States Federal Reserve Chairman Jerome Powell, said they are willing to allow more than 2% inflation to boost the economy.
The news led to a brief rally for Bitcoin BTC and other tokens. Tokens were able to regain recent loss and Ripple Brad Garlinghouse has said that this increase in interest rates will propel people to diversify their portfolios by seeking other assets. In this case, cryptocurrencies will get the most attention.