America's $6 Billion Debt Buyback: Is it Good for Bitcoin?

[UpTober]

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The US Treasury Department has decided to repurchase a maximum of $6 billion in long-term debt. Here, a question naturally arises as to how this government loan scheme is actually affecting the financial system, including Bitcoin. Many may think that changes in the availability of money in the market can affect the price of Bitcoin, and due to this availability of money, investors may be more interested in investing in Bitcoin. However, buying government bonds does not actually mean that more new money is entering the market. However, if we talk about the Bitcoin market, we have to say that it depends on the overall situation, the Bitcoin market.

I just want to know how such a decision by the US will affect the Bitcoin market?

[hd49728]

The US Treasury Department has decided to repurchase a maximum of $6 billion in long-term debt. Here, a question naturally arises as to how this government loan scheme is actually affecting the financial system, including Bitcoin. Many may think that changes in the availability of money in the market can affect the price of Bitcoin, and due to this availability of money, investors may be more interested in investing in Bitcoin.

If they print more US. Dollar to buy back their national debt, it will cause more inflation and purchasing power of US. dollar will continue to decline, more severely and quickly.

The decreasing purchasing power of US. Dollar over time is not new but it has become worse since Pandemic Covid-19. Recent years, FED has tried to retrieve US Dollar printed since the pandemic back but it's a classic issue: printing more money and adding extra money into circulation is always easier than retrieving it back to central banks.

The USA's national debt will continue rising upwards in long term.
https://www.usdebtclock.org/

Any effect will appear in short term and mid term, long term we will witness more inflation but it's big reason for us to save our wealth in Bitcoin.

[348Judah]

And we are complaining more about the inflation scenario when the entire system is not in favor of the masses, anyone to dependent on the Fiat system will definitely be disappointed because there is nothing to benefit from their entire policy over the financial sector, this is where we are all adopting to use Bitcoin as a decentralized digital currency for our privacy and profiting, so that we will not be affected by the Fiat financial policy.

[MusaMohamed]

And we are complaining more about the inflation scenario when the entire system is not in favor of the masses, anyone to dependent on the Fiat system will definitely be disappointed because there is nothing to benefit from their entire policy over the financial sector, this is where we are all adopting to use Bitcoin as a decentralized digital currency for our privacy and profiting, so that we will not be affected by the Fiat financial policy.

Dependent on fiat currencies or are not dependent on them, we are all affected by fiat currencies' inflation, more or less. If we only have our wealth in fiat currency, we will suffer severe loss as consequence of declining purchasing power of fiat currency we have. If we do something more helpful like investment, use fiat currency we have for investment in something, and if that asset grows in value over time, we can reduce effects of fiat currency inflation on our wealth.

It's interesting to call an example from a noisy Bitcoin price speculative post years ago.
Balaji Srinivasan Bets $1M on Bitcoin Hitting $1M Within 90 Days Due to US Hyperinflation.

From price in that year to $1M within 90 days, if it becomes true, the US dollar would have massive killing inflation, much more severe than hyperinflation.

[PrivacyG]

I just want to know how such a decision by the US will affect the Bitcoin market?

United States debt is reaching higher and higher peaks at a rate faster than ever before, they buy back debt to try to keep liquidity and markets some what stable, bond yields are going past 2008, money printing is going crazy every now and then, it does not look like the economy is doing well at all and these are only signs that they are trying to stabilize a big pile of crap from collapsing over the head of every body.  That is why people see that as a good thing for Bitcoin.  But while it may be a good thing for our portfolio, I am personally more worried about what happens when all that crap can not be stabilized any more and actually starts falling on us all.

[LFC_Bitcoin]

It probably, in isolation, means nothing for Bitcoin but the government continuously printing money is obviousoy a good thing for Bitcoin. 

Increased liquidity flowing in to the economy is a good thing because obviously a % of it ends up in assets, namely Bitcoin.

[legiteum]

Who cares? The price of BTC has absolutely no correlation with US dollar inflation. You might as well be asking whether the price of bananas from Brazil will affect the price of BTC.

By the way, only amateurs and poor people consider a currency like USD an "investment". For anybody with any level of sophistication, you invest in... investments. In other words, stocks, land, commodities, and... crypto. Bitcoin doesn't compete with USD, it competes with NVDA, AAPL, gold, some land you buy, baseball cards, and sports betting*.



(* Yes, really, sports betting has been shown to be a direct competitor to Bitcoin trading).

[BlackHatCoiner]

Something is good for Bitcoin when more money are thrown into Bitcoin because of it, or when people learn about Bitcoin because of it. Fed rising/decreasing interest rates, or US government doing a debt buyback, in and on themselves are not directly driving money and people into Bitcoin, so we can't know for sure. We need to zoom out and look on the consequences of these events in history. 

But while it may be a good thing for our portfolio, I am personally more worried about what happens when all that crap can not be stabilized any more and actually starts falling on us all.

What is stable with the current economy, exactly? The only thing stable is the speed by which everything gets more garbage and more expensive. It has already started falling on us. 

[PrivacyG]

What is stable with the current economy, exactly? The only thing stable is the speed by which everything gets more garbage and more expensive. It has already started falling on us.  

I believe we are only looking at the structure of that pile shaking, and when it starts actually falling people will start to run like they are all on fire.

What do you not consider stable?  Every thing is!  Have you not heard about Trump promising to give away thousands and thousands of money through the stimulus checks?  The economy must be booming if there is so much money it is being given away!

[Faisal2202]

I just want to know how such a decision by the US will affect the Bitcoin market?

It's good that you already mentioned it's not QE because it already raised my hopes haha. When I hear the word buyback, I jump directly to the conclusion that it's about money printing.

This will ease financial conditions slightly and can give some relief, but I don't know how big an impact it can have on their economy. It's also a good step because it will free up the balance sheet. It's like grease, as far as I have understood the whole thing, so it's better that they are doing it. Eventually, if it turns out this way, it can be useful for Bitcoin holders too.

[Ambatman]

Well quite a  bunch of their current debt was as a result of interest that have accumulated over the years.
So buying back is a way of curbing the debt but it means nothing much
Is like trying to fill a basket with water.

Many may think that changes in the availability of money in the market can affect the price of Bitcoin,

To a certain extent the more fuxked up the economy is the more attractive Bitcoin is
Since its like an alternative.

[BlackHatCoiner]

I believe we are only looking at the structure of that pile shaking, and when it starts actually falling people will start to run like they are all on fire.

How do you imagine "falling" be like? It will surely get worse, but we already have a society where nobody can buy a house, immigrants are imported as "solution" for the fertility rate decline, men are becoming more women and women are becoming sex toys, taxes have gone through the roof, inflation has made it impossible for an average worker to have a human diet.

When Rome was collapsing, it was because of inflation, and bread & circuses. Then it fell. It was over. The "falling" part lasted only a few days. The "shaking" part was the real deal.