Bitcoin is an indicator of trust in the economy, in central banks and in government interventions

Monetary policy

We compare cryptocurrency price with monetary policy interventions: the central bank activities to control the quantity of money and debt in the economy.

The FED is the US central bank, it is in charge of:

• Increasing or decreasing the money supply: in the first 2007 crisis, there has been an intervention, but with covid the intervention was much higher,
• They can also increase and/or decrease interest rates: lower rates increase the money supply and boost economic activity. But this can create inflation, the Fed must be careful, and that is why they are now increasing them again.
• The Fed can also conduct open market operations knows as quantitative easing: they buy securities from financial institutions, they give them cash, and increase even more the ‘real’ money supply.

Everyone is talking about the money supply increasing, but they forget to mention the ‘real ‘money supply, with Stocker, you can have a full picture!

Fiscal policy

Another way to influence the economy is through fiscal policy: government can target how much money people are spending.

• They can increase and lower income taxes, affecting your net income and consumption power.
• They can inject money on the economy, we call it stimulus, just like the free helicopter checks that were distributed during covid!

The role of blockchain

The economy is heating up, there is clearly no financial innovation coming from banks, and on top of that, you always have insiders in the government and in banks who are using their power on the economy to benefit themselves.

It’s not surprising to see more and more people believe in the blockchain and in decentralised technologies.

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