Bank of England Rate Cut Fails to Spark Bitcoin [BTC] Bulls, Prices Below $8,000

Coronavirus

Earlier today, the Bank of England followed the US FED and other central banks in easing as coronavirus threaten to add more injury to an ailing global economy. Bitcoin (BTC) prices remain neutral but bearish despite this emergency monetary policy change.

The UK’s central bank slashed rates by 0.50% as interest rates fell from 0.75% to 0.25%.

Bank of England (BoE) Slashes rates for the first time in 4 Years

This is only the first time the Bank of England (BoE) and Mark Carney has slashed interest rates. But it was expected.

As Britain breaks away from the European Union in Brexit, the GBP weakened considerably against a basket of currencies including the greenback, Yen, and other outlier currencies.

However, the GBP has recovered, and this rate reduction will no doubt cushion the UK’s fledgling industry against the impact of Coronavirus.

The members of BoE’s MPC unanimously agreed to slash rates:

“The reduction in Bank Rate will help to support business and consumer confidence at a difficult time, to bolster the cash flows of businesses and households, and to reduce the cost, and to improve the availability, of finance.”

“Although the magnitude of the economic shock from Covid-19 is highly uncertain, activity is likely to weaken materially in the United Kingdom over the coming months. Temporary, but significant, disruptions to supply chains and weaker activity could challenge cash flows and increase demand for short-term credit from households and for working capital from companies. Such issues are likely to be most acute for smaller businesses.”

Coronavirus Forcing Extreme interventions in Italy

The virus is already wreaking havoc in several countries including France and Italy.

Italy has announced a lock-down similar to those instituted in China and specifically Wuhan.

Aside from these precautionary measures, more funds will be released to Europe’s third largest economy to mitigate losses.

Bitcoin Prices Swings from Neutral to Bearish

While central banks intervene, Bitcoin prices oscillated from neutral to bearish. Bulls temporarily broke above $8,000 before pulling back to spot rates.

Bitcoin BTC Market Performance
Bitcoin BTC Market Performance

Week-to-date, BTC is under the firm grip of bears and is down 11%. The next halving is less than 60 days.

Against ETH, Bitcoin is up 3% in the last week of trading.

But it isn’t Bitcoin alone. Competing safe haven currencies like the Yen, Bonds, and Gold registered losses. This is because of uncertainty about what the future holds. Without government intervention such as rate cuts, asset prices may further fall, triggering a recession.