Dow Futures drop a whopping 1050 points
I've been anxiously waiting for the DOW futures to open Sunday so we can get an indication of where the markets heading. Yesterday, Trump announced that the Federal Reserve would be creating a 1.5 Trillion dollar QE. Typically cash injections cause a rally in the market. What blows my mind is that the Dow futures market has just opened down 1050 points (4.6 %). It seems that the fears over the coronavirus and it's potentially devestating impact on the global economy is overpowering the benefits of the massive QE injection.
banks around the world have followed suit with their own QE injections but it doesn't seem to be giving the markets a boost.
Below are some of the announcements from central banks.
Federal Reserve just printed $1.5T
People’s Bank of China just printed $79B
European Union just printed $37B
South Korea just printed $10B
Bank of Japan just printed $2B.
Britain just printed $39B
Italy just printed $8.4B
Whats interesting is that Bitcoin hasn't had any reaction to the dow futures opening, yet anyways. Could this be a turning point for bitcoin to decouple from the global markets and set off on it's own path to new highs? I know many people have lost faith in bitcoin recently because it failed itself as a self haven asset during the stock market crash, so far anyways. But what people are missing is that Bitcoin wasn't designed to be a hedge against deflation (when stocks crash), it was built to be a hedge against inflation.
This important distinction must be made in order to understand Bitcoins importance as we enter a global ressesion or worse, a deppression. As the global markets teeter on a knives edge of deflation and inflation, central banks must continue to create an ever increasing amount of stimulous to prop it up. These money injections were already growing in size before the coronavirus but now they have just been pushed in to overdrive.
Last weeks crash in the crypto market has washed every weak hand from the market and left only the strongest die hard believers. They have proved that they are willing to go down with the ship. Long positions have been liquidated and the path upwards will have less resistance now than many think. I for one have not wavered in my belief for crypto, I will hold strong!!
Do you think Bitcoin will decouple?