• Bitcoin slides down but maintains hold above USD 9,200
  • JPMorgan Chase and Goldman Sachs are calling on the US government to extend sizes for their bond purchase programs
  • Chainalysis has debunked several Bitcoin myths, including the one where ISIS has a stash of USD 300 million in Bitcoin

Bitcoin markets fell over 5% today, from an opening 24 hours ago of USD 9,775 to a daily low of USD 9,234 (CoinDesk) but does seem more than capable of holding on to those levels. Bulls will be somewhat perplexed by this turn of events, particularly when there have been plenty of good news coming in on several fronts.

On the back of the slipping price, we saw calls from two of US’s biggest commercial banks, JPMorgan Chase and Goldman Sachs, to increase inflation-boosting government bond purchase programs sizes. These programs, operated by the US central bank and others, are in demand now but there simply isn’t enough left to go around, and so Bitcoin, some believe should begin to appear even more attractive now as an alternative investment that won’t be exposed to inflation — lest we forget the reward halving event just took place about nine days ago. JPMorgan said in a statement to Bloomberg:

“The level of the expected increase in supply this year – about USD 2.1 trillion – is offsetting the USD 1.9 trillion demand for bonds to the tune of USD 200 billion.”

In other words, the investment bank foresees bond yields going up, while reducing in prices since there is a shortage of demand in the bond markets. If this is true, then the costs of borrowing should go up for investors, and put them and other institutionals off from borrowing and investing, pouring more misery on the economy suffering already from the slowdown effects from COVID-19 lockdown.

The ensuing advice from JPMorgan then is that the US Federal Reserve should step up their bond purchase programs to put firm pressure down on yields, something that Goldman Sachs analysts certainly are in tune with. Last week, Zach Pandl, co-head of global foreign exchange, rates and emerging markets strategy at Goldman Sachs, told CNBC:

“If the economy has another big setback … where you have a second wave of infections and it would really take the recovery off course, then I do think that that opens up a possibility of a range of additional actions.”

We then look back at one of the most stereotypical misinformation ever spread about Bitcoin —  that it is a favorite currency of terrorists and criminals. And now, a new report from blockchain forensics specialist Chanalysis has shown a number of high-profile stereotypes surrouding crypto usage to finance terrorist activities to be false.

Of these, one of the biggest claims to be debunked is the talk of Islamic State’s supposedly missing Bitcoin stash amounting to USD 300 million. Mainstream reporting spoke about as fact what Counter Extremism Project director Hans-Jakob Schindler had merely suggested as to that crypto “might have been one of the ways [the funds] might have been used”. The report goes as far as to point out that the director’s theory would have been far from likely, explaining:

“We know that most terrorism financing campaigns have raised less than $10,000, indicating limited adoption. Further, if ISIS had funneled oil proceeds into Bitcoin, trading volume of regional exchanges and money service businesses would have reflected this flow of funds.”

It talks about the harmful effects of misinformation spread by fake reports that can bring down the reputations of legitimate companies who use virtual currencies. The firm calls itself “a trusted investigative partner to governments around the world, preventing terrorists from using cryptocurrency” and states:

“It’s a serious task, and it’s important to be responsible and judicious when releasing information on a subject as consequential as terrorism financing.”

You know what we say in Bitcoin. Do your own research!

 

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