The Bitcoin exchange rate has updated a maximum amid news of an increase in the Fed’s balance sheet for the first time since covid

The bailout Bank Term Financing Program (BTFP) has changed the rules of the game. According to experts, it provided an influx of liquidity into the US economy, which is why the bitcoin rate is growing.

Two influential cryptocurrency analysts, Tedtalksmacro and Arthur Hayes, took notice of BTFP and published reviews: Tedtalksmacro in video formand Hayes – in his usual form articles.

The main news that Tedtalksmacro paid special attention to is that US Fed balance sheet for the first time since covid began to grow.

Dynamics of the balance sheet of the US Federal Reserve for 5 years

The analyst noted that liquidity conditions are becoming more favorable for risky assets:

Last week it became necessary to provide approximately $300 billion in emergency lending to the banking system. That halved the progress the Fed has made by reducing its balance sheet by nearly $600 billion since last June.

Within a week, three U.S. banks — Silvergate, Silicon Valley and Signature Bank — collapsed — enough for the Fed to instantly sacrifice half of the progress it made in the fight against inflation caused by emergency covid issuance of the dollar.

2023 03 17 18.55.11
Biggest bank failures since 2000

Hayes was even more eloquent. “The Fed just – in yet another way – did $4.4 trillion in quantitative easing.” He explained:

The Fed printed $4.189 trillion in response to covid. With the introduction of the bank financing program, the Fed immediately and implicitly printed $4.4 trillion. During the covid money printing, bitcoin rose from $3,000 to $69,000. What will happen to it this time?

“The Fed has just launched an endless money printing regime,” Hayes concluded.

According to the Cryptocurrency Screener Cryptovizor, which determines the market price of BTC/USD based on the results of trading on the largest spot exchanges, the asset reacted positively to the increase in the Fed’s balance sheet. The bitcoin exchange rate updated the level on March 14, and (at the time of publication) reached a new high at around $26,970.

BTCUSDT 2023 03 17 19 10 27
4 hour bitcoin chart. Source: Cryptovizor

Head of trading firm Eight Michael van de Poppe (Michaël van de Poppe) wrote about it on twitter:

It is necessary to maintain support at the level of $26,000. If possible, then further – $28-30 thousand.

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