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Fidelity macro director Jurrien Timmer said on social media that a combination of loose fiscal and monetary policy is clearly bullish for Bitcoin.
Timmer said last week’s U.S. Treasury move to buy back long-term bonds and increase issuance of short-term bills was meaningful in that it weakened the dollar and drove sharp gains in both gold and Bitcoin. He said the market is sensing a precarious moment centered on fiscal dominance and the possibility that the Fed could lose its independence. The underlying assumption, Timmer added, is that the Treasury would need to significantly expand its buybacks to succeed in keeping interest rates low. That, he said, could push the Fed to align with those Operation Twist measures and ultimately lead down a path of currency debasement.
He said the combination of loose fiscal and loose monetary policy is clearly negative for the dollar, which is sitting on its long-term trendline, and clearly positive for gold and, by extension, Bitcoin. Timmer also said gold and Bitcoin had been laggards in this year’s upward momentum, but are now rapidly narrowing that gap, adding that both still have ample room to rise further.