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Crisis fighting Bitcoin: Crypto gaining a safe haven reputation

Bitcoin as a safe haven and not for speculation purposes might be novel but perhaps sound. Here's what experts say

The first six weeks of 2020 saw the coin break $10,000 for the first time since September 2019 Bitcoin surged after the FED acknowledges it is working hard on a crypto on news of china’s haste in developing the e-Yuan Now is the time for central banks to prepare for the next financial downturn

Investors have moved a record amount of funds out of stocks and into bonds and other ‘safe’ assets, like Bitcoin, according to analysis. Bond inflows last week reached $23.6 billion, which would see a record $1 trillion added to the $10 trillion bond market in 2020. By comparison, equity funds took in a net $8 billion in 2019.

Despite its volatility and weak regulatory environment, Bitcoin is gaining credence as a safe haven.

The first six weeks of 2020 saw the coin break $10,000 for the first time since September 2019.

Read: Crypto Mining your own business: is it for you?

A crypto store of value

Atestimony from Federal Reserve Chairman Jerome Powell got very interesting for bitcoin, as BTC/USD spiked 4% to $10,200 following it.

Cryptocurrency markets soared after Congressman Bill Foster raised concerns about the need to keep pace with China’s digital currency (e-Yuan) ambitions to which Powell responded that the Fed has a “lot of projects” underway.

Bitcoin surged after powell acknowledges fed is working hard on crypto on news of china’s haste in developing its own crypto coin, both of which are fanning bitcoin values.

According to a Bloomberg report, US Federal Reserve chairman Jerome Powell has finally admitted that the central bank may not have the firepower to fight the next recession, reported Beincrypto.

Following three reductions last year, the FED’s target for short-term interest rates is now at 1.5% to 1.75%. Comparatively, Bitcoin’s inflation rate will be dropped to 1.8% after the halving in less than ninety days’ time.

Today Bitcoin is right on $10k.

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Crypto is about to become a mainstream technology for the world’s second-largest economy. China is planning to use blockchain in its “belt and road” initiative.

Read: Bitcoin as a global currency? Likely never, but neither is the mighty Dollar

Recession-Downturn-safe havens

Now is the time for central banks to prepare for the next financial downturn, J.P. Morgan Chase’s International chairman, Jacob Frenkel said in a CNBC interview on “Squawk Box” from the World Economic Forum in Davos, Switzerland.

In February 2019, JPM announced that it was creating a digital coin call JPM Coin to facilitate “instantaneous transfers of payments between institutional accounts”.

But unlike cryptocurrencies where values are determined by market forces, each JPM Coin will have a fixed value of one US dollar. The sole reason why a digital coin had to be part of the process was to utilize blockchain technology for the transfer. 

JPM Coin is currently only in the prototype stage, pending regulatory approval.

Bitcoin was first revealed to the world during the height of the credit crisis in 2008.