Analysis: Bitcoin continues to rebound, the reasons behind it may be these three

The price of Bitcoin has gradually rebounded since yesterday, once approaching the $ 7,000 mark, with a maximum increase of 16%. There may be three main reasons for this market rebound:

Analysis: Bitcoin continues to rebound, the reasons behind it may be these three

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Fed discusses fight against epidemic with digital dollar

House Democrats have proposed two bills around the creation of digital dollars and digital wallets so that the Federal Reserve (Fed) can transfer digital cash directly to individuals and businesses. The move aims to support the economy during the COVID-19 pandemic, as the United States is already second only to China and Italy in terms of the number of confirmed cases.

The two draft bills are known as the Accountability to Workers and Families Act and the Financial Protection and Assistance Act to US Consumers, States, Businesses, and the Vulnerable. According to the authors of the legislation, the Federal Reserve will use digital dollars and digital wallets to transfer funds to "eligible individuals," $ 1,000 for minors and $ 2,000 for adults.

The two draft documents use the same definition for digital dollars:

"The term 'digital dollar' means a balance expressed in dollar value, which includes a digital ledger entry of liabilities recorded in any Federal Reserve bank account; or a type of financial ledger (by the Federal Reserve Board Decision) Redeemed electronic value unit.

The law is likely to be backed by Congress, and the Fed will not mind because it previously acknowledged that it is considering issuing digital currencies.

Update: According to the latest news, the latest version of the US House Democrats' stimulus bill against a new coronavirus has cancelled the "digital dollar" proposal.

Fed announces unlimited QE, stocks, bitcoins respond

Yesterday, the market was surprised by the Fed's announcement of unlimited support for the economy. In addition to buying more US Treasuries and mortgage-backed securities, the US Central Bank will also buy corporate bonds and related exchange-traded funds (ETFs).

Johnny Fine, head of Goldman Sachs investment grade bonds, told CNBC:

This is unprecedented action by the Federal Reserve.

Todd Rosenbluth, director of institutional independent equity research firm CFRA Research, said:

"Wow. The Federal Reserve will buy investment-grade corporate bonds #ETF, such as roughly $ LQD $ VCIT $ SPIB. These funds are diversified and liquid, but demand for base bonds has weakened. This is a whole new world."

The Fed will buy corporate bonds under a program called "secondary market corporate credit financing."

The Fed's unlimited quantitative easing policy has stimulated the stock market, thereby encouraging many institutional investors to review other assets, including Bitcoin.

China nears victory over new crown pneumonia (COVID-19), new treatments are being tested

Although the number of imported cases has increased, China has reported zero local cases for several days in a row. Nevertheless, companies in many parts of China are returning to production. However, many people worry that imported cases may trigger another wave.

Another sign of hope is an antimalarial drug called hydroxychloroquine, which has recently been touted by US President Donald Trump. This drug has been around for more than 70 years and COVID-19 has been successfully used as an antiviral drug in many hospitals in China, South Korea and France.

However, many experts have warned that the drug and its predecessor, chloroquine, have not yet been formally approved as a COVID treatment. In addition, following Trump's comments, taking chloroquine poisoned several people and even died of overdose.

Although the drug is known to have potentially serious side effects, especially if the dose is ignored, many trials have begun in Europe because it is one of the drugs that has shown impressive results against the new coronavirus.