$175 billion just printed and the Bitcoin price goes down!

[Kakmakr]

This is really amazing, the Federal Reserve just printed some more toilet paper money and injected it into the financial market and the Bitcoin price takes a 5% nose dive. 

How gullible are the investors that they would be willing to pull money out of their Bitcoin investments to fund investments in the over inflated stock markets. 

I think this is just another Bear trap in the making, because we all know what is going to happen on the 23rd of September, when Bakkt is going live!

Let's stay calm and ride this out, because I am definitely not going to sell my coins to greedy scumbags, who are just into Bitcoin for the quick profits. 

Do you think this is a Bear trap? Let's discuss...... 

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[o_e_l_e_o]

I thought it was $75 billion? Do you have a source for $175 billion?

I've not had much time in the last few days to read about this properly, but I'm pretty sure this money is bought back the next morning. If there is a shortfall of cash, the Fed will spend money in cash to buy assets from banks, and then the next day the bank will buy back its assets form the Fed. This isn't really printing money in the sense we usually think about - this is money the Fed was already holding, and which will be removed from the monetary supply within 24 hours (actually, slightly more will be removed because the Fed charges the bank interest on this deal).

That's not to say that fiat isn't a sinking ship, and more money is printed over time as and when the banks or the Fed fancy, but this isn't that. This is, however, the first time the Fed has had to make one of these deals in over 10 years (from what I've read), so it is certainly another indication of the strain on the markets and potentially another impending recession.

[Kakmakr]

I thought it was $75 billion? Do you have a source for $175 billion?

I've not had much time in the last few days to read about this properly, but I'm pretty sure this money is bought back the next morning. If there is a shortfall of cash, the Fed will spend money in cash to buy assets from banks, and then the next day the bank will buy back its assets form the Fed. This isn't really printing money in the sense we usually think about - this is money the Fed was already holding, and which will be removed from the monetary supply within 24 hours (actually, slightly more will be removed because the Fed charges the bank interest on this deal).

That's not to say that fiat isn't a sinking ship, and more money is printed over time as and when the banks or the Fed fancy, but this isn't that. This is, however, the first time the Fed has had to make one of these deals in over 10 years (from what I've read), so it is certainly another indication of the strain on the markets and potentially another impending recession.

The press are playing with numbers --> https://markets.businessinsider.com/news/stocks/fed-repo-injects-billions-into-market-first-time-in-decade-2019-9-1028534289  " The central bank has injected a total of $128 billion into markets — $53 billion on Tuesday and another $75 billion on Wednesday. " ... but the amount is not the main issue now, rather the fact that they are doing this again after 10 years. 

The warning signs are there that the government is trying to rescue Bond markets and the whole lending system in the USA and in times like this, smart investors should rather pull their investments and look for safe havens.... but they are doing the opposite. Why? 

[tonyvo2017]

No, I don't think this is a trap. because I see that this is the rule of the financial market. In which markets are beneficial, the whales will usually go there and eat their prey, after the food runs out, it will return to the starting point.
This is also a good signal to buy more bitcoin and hold, it is about to grow again!

[cosmofly]

This is really amazing, the Federal Reserve just printed some more toilet paper money and injected it into the financial market and the Bitcoin price takes a 5% nose dive. 

How gullible are the investors that they would be willing to pull money out of their Bitcoin investments to fund investments in the over inflated stock markets. 

I think this is just another Bear trap in the making, because we all know what is going to happen on the 23rd of September, when Bakkt is going live!

Let's stay calm and ride this out, because I am definitely not going to sell my coins to greedy scumbags, who are just into Bitcoin for the quick profits. 

Do you think this is a Bear trap? Let's discuss...... 

This is not a bear trap, because this decline has not yet been called a bear, it is only a slight decrease as the stock market has more potential in the short term.
Don't worry, when the stock market gets less busy, those investors will return to Bitcoin and pump its price up. Keep holding !

[fillippone]

It doesn't work like that, you cannot add the amounts like that as they are Overnight Repos: so the FED prints money in the evening, and destroys it the morning after. It is due to balancing banks reserves in the system to counteract to temporary imbalances.
So now (19 september 2019)  they printed only 75 until tomorrow morning.

They did it several times in the past few days:

• 53 BLN on Tuesday 9/17 to 9/18
• 75 BLN on Wednesday 9/18 to 9/19
• 75 BLN on today 9/19 to 9/20

Here you understand the amount of money created is the same and equal only to the currently live operation.
It's part of the job of any central bank. The point that it hasn't been necessary since 10 years has no implication whatsoever for financial stability.


Explainer: The Fed has a repo problem. What's that?

In a repo trade, Wall Street firms and banks offer U.S. Treasuries and other high-quality securities as collateral to raise cash, often overnight, to finance their trading and lending activities. The next day, borrowers repay their loans plus what is typically a nominal rate of interest and get their bonds back. In other words, they repurchase, or repo, the bonds.

The system might be rotten, but this one is not a proof of that.
For sure I can't see why bitcoin should rise on this particular news.

[Lucius]

The warning signs are there that the government is trying to rescue Bond markets and the whole lending system in the USA and in times like this, smart investors should rather pull their investments and look for safe havens.... but they are doing the opposite. Why? 

Maybe because they're not smart, or they don't even understand what Bitcoin is? Or they stick to traditional "safe havens" like gold which goes high close to $1500 per ounce., or maybe they like to invest in bonds with negative-yielding which has increased almost three times in just a year to $15 trillion. Smart investors like to play with trillion $ markets, and Bitcoin is just under $200 billion today.

I would say that this printing is not couse of recent very small dip of some $300, it's something that's been happening constantly in recent months.

[fillippone]

Investors are smart, and they do know what bitcoin is and how it could be used by them.
They perfectly know how a decorrelated, high volatility asset could fit in their portfolios (here a post detailing in a simple way why the're looking so attentively to bitcoin in their portfolios..
The point is they cannot get exposure to bitcoin, even if they want to.
They cannot buy bitcoin: it is not on the investment mandate of 99% of the investors on the streets. They simply cannot touch it.
This is why a tradable form of bitcoin, say BAKKT or some sort of Exchange Traded Fund (or any other listed alternatives, OTC trading is not a viable options for many, as SolidX fiasco showed) is so important to get money inflows from institutional investors.

[carter34]

I think it is, I don't expect price to fall this time when it is beginning to get some positive move. I will rather keep hodling.

No, I don't think this is a trap. because I see that this is the rule of the financial market. In which markets are beneficial, the whales will usually go there and eat their prey, after the food runs out, it will return to the starting point.
This is also a good signal to buy more bitcoin and hold, it is about to grow again!

You said no to the question but what you have written deduced that it is a trap.

[o_e_l_e_o]

The point that it hasn't been necessary since 10 years has no implication whatsoever for financial stability.

I'm not so sure about that. The Fed having to do this to such an extent suggests a lot of banks are not meeting their fractional reserve requirements. Banks are no long funding their own debts with their own deposits, and instead they are relying on the federal reserve to bail them out on a nightly basis. Something has changed recently (we don't know what) to force the federal reserve to come in with $75 billion on a nightly basis to support the banks.

Banks should be able to support themselves. If they are experiencing daily shortfalls, then it can impact on other lending, which can impact on the entire economy. The Fed having to bail them out like this is a bad sign.

[Harlot]

More like a correction to me rather than a bear trap but our views is headed in the same direction that Bitcoin is headed to go up. I do think that there is no connection of Bitcoin going down because the US has printed more money it's just 175 billion dollars spread out in every market and it covers everything to the point it won't have any effect in ours. Like I said this is just a a correction since we have been consolidating for so long and Bitcoin has just decided to take a first move in the market. The price did bounced well in the trend lines and we are now back up again at the 10,000$ level it may not have removed its loss today but  I think it's better than not recovering some of it at this moment. We are lucky that we had a correction as it also made the RSI oversold which is a good sign at the 10k level, we might see some early push in the coming days.

[fillippone]

<snip>

FED is not bailing out banks.
Capital markets are well functioning and banks were trying to cover a massive reserve drain of roughly 170 billions in a few days (equivalent to the while bitcoin capitalisation, btw) because of a large fiscal payment date is approaching for many corporate in the US.
Overnight rates were going up too fast, too quickly, so the FED downplayed the move with one of his tool.
I can go very technical on this if you want, but believe me not to read too much into that.

[o_e_l_e_o]

Capital markets are well functioning and banks were trying to cover a massive reserve drain of roughly 170 billions in a few days (roughly the while bitcoin capitalisation, btw)  because a large fiscal payment date for many corporate in the US.
Overnight rates were going up too fast, too quickly, so the FED downplayed the move with one of his tool.

I appreciate that, but my point still stands. If this was due to a payment date (I'm not sure it was,  but let's assume for the sake of argument), then those payments were completely predictable, and yet the banks still couldn't pay them. The rates were only going up too fast because too many banks were running out of liquidity and having to borrow.

Yes, this is a tool the Fed can use, but they only had to use it because banks were irresponsible and backed themselves in to a corner. The fact that banks can print so much money out of thin air that they run out of even the small fraction of reserves that they keep and the Fed has to step in is a symptom of just how messed up fiat money is.

[Tylev]

It is unlikely that there is a direct correlation between printing additional amounts of paper dollars and lowering the price of bitcoin. Such manipulations with cash occur regularly, but this did not affect, at least noticeably, the price of bitcoin. In the world there are various financial processes with cash and it is hardly worth paying serious attention to such a fact in a single state.

[xSkylarx]

I think this is just another Bear trap in the making, because we all know what is going to happen on the 23rd of September, when Bakkt is going live!

Will that really happen? I mean after the $20k ATH last 2017 many speculated that it would even go to $50k on 2018 but what happen devastated everyone in the crypto world. I'm not saying that it would crash but I just don't  want that to happen again. I'm even willing to sold my ltc holdings bought at 0.012 for bitcoin but still hesitant about what happened last year. Opinion guys?

[zenstrive]

and now the price is back to 10200+
Moon Soon?

[Kakmakr]

<snip>

FED is not bailing out banks.
Capital markets are well functioning and banks were trying to cover a massive reserve drain of roughly 170 billions in a few days (equivalent to the while bitcoin capitalisation, btw) because of a large fiscal payment date is approaching for many corporate in the US.
Overnight rates were going up too fast, too quickly, so the FED downplayed the move with one of his tool.
I can go very technical on this if you want, but believe me not to read too much into that.

Well, without going into too much detail about this, we can see that governments are manipulating the value of your wealth. Bailouts and rescue practices are either hiding the real problems or they are postponing the economic collapse. 

So tax payers money are used to serve as a safety net for greedy financial institutions and the general public are paying for it. The Banks and the Reserve Banks are part of the problem with the fiat system and the government are protecting them. 

[davis196]

175 billion dollars is peanuts.
Such small amount won't change anything in the US economy or in the global economy.
By the way,the bitcoin price recovered from the 5% nose dive,so I think it's wrong to search for a correlation between the bitcoin price and how many billions were printed by FED.
There's no bear trap and Bakkt won't change anything.

[slocker]

Probably true on everything. Seem like banks dont have answer for this and they try by printing to gain something maybe little control and destabilizing the crypto market.
Printing such large amount can be for many reasons and factor and probably they are only who knows the right one. The things we read from papers and everything else is just something that they want us to read and speculate. Considering price recovered thins is first sign that it was not crypto related.

[TheCoinGrabber]

Haven't heard of this news but I guess this is more reason to hold bitcoins or even buy more as the price goes down. We all know that we're ripe for another crash. Even without this injection there are reasons to safeguard our money before it becomes worthless.