Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
While more than 30 major economies around the world have announced interest rate cuts this year, it seems that Bitcoin, as well as other major cryptocurrencies, set to prosper.
On September 18, the Federal Reserve announced another 25 basis point interests rate cut, bringing interest rates down to 1.75% to 2%. This is the second rate cut by Federal Reserve since 2008. The last rate cut was on August 1 this year, with an interval of only 48 days.
Notably, at least seven of 17 fed members think they will cut rates again this year. Meanwhile, US President Trump has publicly said he lacks the courage to cut interest rates and will continue to press federal reserve.
On the day Federal Reserve announced its second interest rate cut, central banks such as Brazil, Saudi Arabia, the United Arab Emirates, and Indonesia, also chose to cut interest rates in public interest rate resolutions or comparable easing policies.
In fact, more than 30 major economies around the world have announced interest rate cuts this year. Among them, Europe and Japan have been on the edge of negative interest rates, and ECB has also said that it will purchase assets from the market indefinitely at a monthly limit of 20 billion euros starting in November. This means that ECB has set the route for quantitative easing.
Countries in the global interest rate cuts do not seem to have a better choice in prisoner’s dilemma.
According to BIS data of 38 major central banks around the world, if current easing is maintained, central banks are expected to see more than 50 interest rate cuts in the world in the coming year. Such a loose monetary policy does not rule out the possibility of forming a situation close to that of 2008, and further expand the gap between the rich and the poor.
Bitcoin, as we know it, was proposed in the 2008 financial crisis. Its de-centralization and algorithm characteristics can ensure that the value of Bitcoin can not be manufactured artificially by a large number of Bitcoins. The design based on cryptography can make Bitcoin only be transferred or paid by the real owner.
In ten years, Bitcoin has changed from a code punk hobby to a unicorn with a total market value of more than $100 billion, leading to the birth and development of thousands of digital currencies.
Nowadays, the mainstream digital currency has become an important target of investment, reserve, circulation and asset hedging, and its status is more and more in line with the label of “digital gold”. According to historical experience, when regional or global inflation or other unstable factors occur, the prices of mainstream digital currencies will rise accordingly. For example, severe inflation in South America has pushed up market value many times.
If central banks do not have better response measures, or if there is no major breakthrough in science, technology, and economy, then the continuous monetary easing policy may stimulate digital currency market to start a new round of rising prices, and promote mainstream currencies to new value highs.
For new investors entering the field of digital currency trading, currency fluctuation and exchange security are two things that need to be considered most.
AOFEX, a digital currency exchange known for its security, reminds investors that investing in digital currencies with asset hedging and savings is the need to choose mainstream currencies as much as possible to reduce risk.
AOFEX has a bank-level security risk control system and technology to fully guarantee the fairness of transactions and provides users with 24 quality service. It not only provides users with more reliable security guarantees but also greatly enhances users’ trading experience.
The core team of AOFEX has been deeply engaged in fin-tech fields for many years, providing strategic planning for a large number of high-tech enterprises and core services for many financial institutions. AOFEX team has a very strong global strategic operation capability, as well as rich experience in financial risk control and management.
AOFEX introduces world’s top traditional bank financial risk control system, adopts multiple underlying security technologies, establishes an internal supervision and early warning system, and sets up a risk reserve mechanism to provide users with a more secure encrypted digital currency trading environment.
AOFEX has reached strategic cooperation with Slow Mist Technology, which is an expert in blockchain security, and launched a series of AWL safeguards, in line with the new policy of International Financial Action Task Force (FATF), which is the first to be implemented. Anti-money laundering KYC and large-value transaction analysis successfully identified a number of accounts suspected of involving laundering, and then frozen the account.
In the future, AOFEX will make efforts in security, financial crime prevention, and other aspects to bring more safe and convenient professional services for investors.