Repro market cash shortage... is it something to be worried about?

[TheWolf666]

The repro market is seeing a shortage of cash that forced the FED to do an emergency meeting yesterday night to print 53 Billions.
They also lowered the interest rates of 0.25

It was not enough, today there is again a shortage of cash in the repro market. So what is coming next? It says that a total of more than $90 had to be printed so that the bank can continue to borrow.

When the FED had their meeting yesterday night, the crypto got about 10% jump. Today because of the FED lowering the interest rates, the crypto dump 10%. Are the market becoming crazy or are we seeing the first sign of correction coming?

Here are the two articles worth to read about this subject.

https://www.zerohedge.com/markets/nobody-knows-whats-going-repo-market-freezes-overnight-rate-hits-all-time-high-10

https://www.zerohedge.com/markets/fed-begins-repo-operation-funding-rates-ease

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[adamlillian]

I think this is the right response and I have no questions about it. because when the Fed lowers the interest rate, that's when money flows out of the central bank and that makes the value of money or some securities grow in a short time. That's why many sharks sell coins to buy stocks or forex to make more money.

[o_e_l_e_o]

The repro market is seeing a shortage of cash that forced the FED to do an emergency meeting yesterday night to print 53 Billions.

This is not money that was "printed". This is money the Fed was already holding which it lent to banks overnight, fully collateralized with assets from the bank, and was then repaid in the morning. It is not new money entering circulation, and in fact, these movements remove a small amount of money from circulation since the bank has to pay interest on the overnight loan.

When the FED had their meeting yesterday night, the crypto got about 10% jump. Today because of the FED lowering the interest rates, the crypto dump 10%.

Correlation does not equal causation. There is nothing to suggest the recent fall and jump in bitcoin price was due to this move by the Fed. Also, the price changed from $10,200 to $9,850 and back again, which is around 3%, not 10%.

I think it's a bad sign for the fiat economy that the Fed has had to step in with this move for the first time in over 10 years, but this isn't printing money as you are suggesting.

[avikz]

The repro market is seeing a shortage of cash that forced the FED to do an emergency meeting yesterday night to print 53 Billions.
They also lowered the interest rates of 0.25

It was not enough, today there is again a shortage of cash in the repro market. So what is coming next? It says that a total of more than $90 had to be printed so that the bank can continue to borrow.

When the FED had their meeting yesterday night, the crypto got about 10% jump. Today because of the FED lowering the interest rates, the crypto dump 10%. Are the market becoming crazy or are we seeing the first sign of correction coming?

Here are the two articles worth to read about this subject.

https://www.zerohedge.com/markets/nobody-knows-whats-going-repo-market-freezes-overnight-rate-hits-all-time-high-10

https://www.zerohedge.com/markets/fed-begins-repo-operation-funding-rates-ease

Firstly, it is NOT "repro", it's "repo". It's a market controlled by the central banks from where banks borrow money for short/long term. It is an effective tool to fight inflation. When the inflation rises, central bank increases the repo rate to drain out the excess money supply from the hands of people to banks and vice versa!

Now coming back to the money printing business! In no way, repo rate reduction calls for money printing. When a central bank needs to increase the money supply in the market, it comes for their reserve! New money is not printed because it further devalues the currency. No central bank would risk that during the time of cash crunch. It's suicidal!!

Now coming to the correlation! There's none at all! 10% ups and downs are very very normal to the crypto market. If there was a correlation, the price of bitcoin would have jumped after both extra cash supply and interest rate reduction. It wouldn't have decreased!

[davis196]

It's kinda funny to think that FED has reserves.They can print all the money they want and the short term inflation will be minimal.There's no point of holding reserves.Anyway,the US economy is heading towards a recession and increased money supply,lower interest rates and money injections in the repo market won't solve the problem.I don't think that this has something to do with the current bitcoin price.

[hugeblack]

I don't think we have reached the stage where cryptocurrencies interact directly with changes in the financial market. They are not like gold, and so far they are an investment option and not an alternative to financial investments.

It is political that controls the landscape, so the uncertainty that exists doubles the risk of lending.

[el kaka22]

It is something to be worried about but there is literally nothing we can do about it. These banks do whatever they want and if they make money then they write is as profits, if they lose money then FED saves them by giving them more money, in the end they can literally never lose.

Think about it this way, you buy bitcoin and if it goes up you are richer, if it goes down someone gives you the difference, wouldn't you trade more and more riskier trades, wouldn't you go for the 100x leverage in the end? After all there is no downside and you can't ever lose money and only profit or stay same. So, at the end of the deal it is horrible and quite scary but there is nothing regular people can do, you can vote for people who will stop this but there are very few of them around.