Loose Fiscal Policy Triggers Bullish Trend for Bitcoin
Fidelity's macro director Jurrien Timmer believes that the current combination of loose fiscal and monetary policy is 'clearly bullish' for Bitcoin. The recent U.S. Treasury move to buy back long-term bonds and increase issuance of short-term bills has weakened the dollar, driving gains in both gold and Bitcoin.
Timmer warns that rising fiscal dominance could force the Federal Reserve to accommodate government spending, which may lead to currency debasement. He notes that this scenario is negative for the dollar, sitting on its long-term trendline, and positive for hard assets like gold and Bitcoin.
Both gold and Bitcoin have been laggards in this year's upward momentum but are rapidly narrowing the gap. Timmer says they still have ample room to rise further if the policy mix remains accommodative.