• Bitcoin remains above strong USD 9,000 support
  • BitPanda CEO Eric Demuth says Bitcoin is like Gold 2.0
  • Despite the US Federal Reserve pumping out USD 89 billion worth of repos overnight, banks demanded for USD 118 billion

 

Bitcoin has had a solid weekend so far, with bears and sellers failing to break the USD 9,000 support for over 36 hours now, and Bitcoin trading at an ever so slightly higher price than yesterday at USD 9,113 (CoinDesk) at time of writing, with a daily high of USD 9,191 so far.

Yet another high-profile personality has given Bitcoin his stamp of approval, as the CEO of BitPanda, one of the largest regulated crypto exchanges in Europe, dubs Bitcoin the millennials’ choice for “gold 2.0”.

Eric Demuth was in Istanbul for the Blockchain Economy 2020 conference when he said during a keynote address:

“Depending on the regulation, it can be quite a good thing now that the industry and many companies have reached a size that matters.”

The conversation had first started when it was announced that BitPanda had chosen Turkey as the first location to expand outside of the European Union. Asked why, he said that besides only being “two hours away with the plane”, Turkey’s cultural affinity and high demand had only made business sense.

Demuth’s exchange has steadily been increasing its list of tradeable assets, from typical cryptocurrency like Bitcoin and Ether, to ERC20 tokens and now even precious metals like gold and silver. But the CEO had no hesitation in calling Bitcoin “a better version of gold”, or Gold 2.0.

He did say though that this doesn’t mean Bitcoin would displace gold as the world’s favorite safe haven asset. He explained:

“That supports the theory I always have that Bitcoin is Gold 2.0 for a younger and ‘more digital’ generation… I think crypto has already become an asset class that owns its own that will never vanish again. They will always be there. Especially, Bitcoin is like the gold standard of crypto. There will never be a world without digital assets or digital currencies.”

The CEO is also adamant that the European Union made a good decision to regulate crypto but without interfering earlier on, even if it does mean some difficulty for enterprise at the beginning. He named the 5th Anti Money Laundering Directive (AMLD5) as the current regulations that could have been bad for innovation years ago, but today is timely. According to Demuth:

“They only observed, let things happen, give them (startups) a broader framework. The EU waited for the whole industry to get big enough to start defining the ruleset.”

Meanwhile, fiat money seems to be digging an even deeper hole for itself, having now pushed out what is equivalent to half of the entire Bitcoin supply into the economy recently via so-called repurchase operations (or repos). So far, repos worth USD89 billion was injected into the economy on 5 March itself, yet the banks are calling for even more.

Repos by nature provide the banks, as lenders, with more but temporary liquidity, but is essentially making money out of nothing. The US Federal Reserve had been responding to further weakness in the economy, as coronavirus concerns had pushed the central bank to make interest rates even lower in February.

To inject what was worth basically 9.8 million Bitcoin in a single day wasn’t even enough to satisfy the demand for liquidity, with the repo demand exceeding even the central bank’s limit, said the Wall Street Journal. It wrote:

“The Fed added the money via what’s called an overnight repurchase agreement operation, or repo. Eligible banks, called primary dealers, sought USD 111.48 billion from the central bank, exceeding the USD 100 billion cap the Fed placed on overnight repos.”

Bitcoin analysts took no time to sound the death knell for fiat’s health, pointing out that money already had no intrinsic value based on assets backing them. Morgan Creek Digital co-founder Anthony Pompliano underlined:

“Cut interest rates and print money. These are the tools of central banks.”

While coronavirus fears continue to wreak havoc on traditional markets, it has also impacted Bitcoin (or at least, has had no visible impact long-term). But in the wake of rising confirmed cases for the global pandemic, stock markets have been dropping, while fiat values have been shedding as well.

 

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