The Federal Reserve (Fed) did what it did for months in the 2008 global crisis, as the economist Erkan Öz put it, and after the outbreak of a new type of coronavirus (COVID-19), which occurred in Wuhan, China, leading to the death of more than 6,000 people worldwide. interest rates almost 0, and announced that it would go for $ 700 billion in monetary expansion.
The drop in oil prices due to the drop in oil demand due to the coronavirus epidemic caused a crisis in the markets, and stock markets worldwide crashed last week. For this reason, the Fed’s interest rate decision was curious. Dow Jones, S&P 500 and Nasdaq indices completed the week with record rises after the worst day closure of 33 years (March 12, 2020) was declared a national emergency in the USA.
While the Fed almost zeroed the interest and went for a $ 700 billion monetary expansion, the Fed’s intervention in the market was not able to produce the expected effect. Dow Jones Stock Exchange Industry Index, S&P 500 and Nasdaq continued to decrease.
On the other hand, crypto money markets started to rise shortly after Fed announced. Bitcoin (BTC) went up to $ 5,823, but this rise was not this long-standing. The biggest cryptocurrency has dropped again hours after the announcement and is trading at $ 5,275 at the time of writing.
For Bitcoin price, which has been acting in parallel with global exchanges for a while due to the coronavirus epidemic, the decline in the US exchanges may be a sign of a significant decline.
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