A statement confirms the Fed will ease the strain on banks over the new year period by creating more than three times Bitcoin’s market cap in new money.
The United States central bank will inject at least $425 billion of nonexistent money into the economy by the middle of next month.
In a statement released Dec. 11, the Federal Reserve confirmed it would ramp up so-called repurchase, or “repo,” operations on key dates over the new year period.
Fed to “print” 3x Bitcoin market cap in weeks
The time of year required extra assurances for banks, the Fed claims, with repo operations designed to support their day-to-day operations.
“The Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York has released the schedule of repurchase agreement (repo) operations for the monthly period from December 13, 2019 through January 14, 2020,” the statement reads.
The Fed then confirms:
“In accordance with the most recent FOMC directive, the Desk will conduct repo operations to ensure that the supply of reserves remains ample and to mitigate the risk of money market pressures around year end that could adversely affect policy implementation.”
Repo offerings on Dec. 31 and Jan. 2 will be $150 billion. By the Jan. 14 deadline, the minimum the Fed expects to generate is $425 billion.
While common, such moves involve conjuring vast new liquidity based on zero backing — essentially money printing without physically printing any money.
Critics, especially in Bitcoin (BTC) circles, have long highlighted the policy as an example of the failure of central banks to “manage” economies.
The argument forms a central tenet of Saifedean Ammous’ popular book, “The Bitcoin Standard,” in which he argues that the fall of nations and empires stems from the fall of a currency that is not allowed to operate free of manipulation.
Similar calls in favor of Bitcoin surfaced in September during a previous repo spike.
“Everything is fine though,” he ironically summarized.
As Cointelegraph previously reported, U.S. national debt reached $23 trillion in November — around $12 million for every Bitcoin that will ever exist. That figure is now at $23.12 trillion, according to online monitoring resource U.S. National Debt Clock.