Traders expect that the US Federal Reserve would cut interest rates target to deal with Bitcoin (BTC) post-halving.
Wall Street traders already consider that the Fed cutting rates are more than 75 percent likely to boost the economy over coronavirus.
By September, the cuts could total 0.75 percent, for the first time in three years, bringing the short-term interest rate below 1 percent.
The Fed did not appear to be rattled by coronavirus, which is now spreading faster outside of its China epicenter than inside it.
“I think it would be premature until we have more data and have an idea what the forecast is to think about monetary policy action,” Charles Evans, president of the Chicago Fed, said on Thursday.
“But we’re monitoring it very closely and if we see something that does require adjustment I’m confident that we will give that all the consideration that it needs.”
U.S. President Donald Trump has previously described the coronavirus threat to the country as still “very low.”
A potential dramatic reduction in the rate would see the Fed keep to the planned decrease in the Bitcoin set for May supply. The event will shave 50 percent off the lot of “new” Bitcoins released to miners every 10 minutes, known as the block reward halving.
After halving, the inflation rate of Bitcoin will be below 2 percent — less than the current long-term goal of the Fed, and also undermining that of gold.
Bitcoin-Coronavirus Relationship
The relationship between Bitcoin and coronavirus remains, meanwhile, a subject of speculation. Earlier rising as markets became unsettled, further deterioration has also driven BTC / USD down.
Away from the U.S., the Dow Jones suffered its largest one-day downfall in history on Wednesday. A well-known pro-Bitcoin analyst is already betting that $40,000 is hit by Bitcoin before 40,000 points are seen by the Dow.
