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Bitcoin has never seen a global recession, may act as an escape hatch next time, says Erik Voorhees

Priya

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Bitcoin has never seen a global recession, may act as an escape hatch next time, says Erik Voorhees
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One of the most common notions in the cryptocurrency space is that Bitcoin [BTC], the largest cryptocurrency by market cap, would be the one cryptocurrency which would benefit the most during the next financial crisis. This is mainly because normal citizens would lose faith in large financial institutions and place their faith in something that is completely under their control, without the need of a third party.

Bitcoin was touted as the coin that would liberate people of the shackles of the centralized systems and Erik Voorhees, the CEO of Shapeshift, a leading cryptocurrency exchange platform, spoke about this on his social media handle.

Recently, Narayana Kocherlakota, the Former President of the Minneapolis Federal Reserve, published an article titled ‘The Fed Needs to Fight the Next Recession Now’ on Bloomberg. Here, Kocherlakota stated that the “Fed would have arguably less firepower than in any previous recession”, taking into consideration its ability to increase growth was by decreasing interest rates.

The Former President explained that during the dot-com bubble burst in the 2000s, the Fed had to decrease their interest rate by over 5 percent in order to ensure that the unemployment rate stayed below 6 percent. However, the cut of over 5 percent during the housing bubble did not have the same effect, with the unemployment level rising in double digits, he stated. He further added,

“Now, it looks like the neutral interest rate over the next few years – the central bank’s starting point when the next downturn comes – could be as low as 2.5 percent. So unless it takes rates into negative territory, which seems unlikely, its response can be only about half as large as in the last two recessions.”

Further, Kocherlakota asserted that this was not the only option the Feds could opt for and added that there were other options such as buying bonds and mortgage-backed securities in order to “push down longer-term interest rates”. However, he stated that “many economists [including me] remain unconvinced that these actions had, or will have, much effect”.



To this, Erik Voorhees said on Twitter,

“There has never been a global recession since Bitcoin was created. Next time it happens, there is an escape hatch.”

Adrian Bye, a Twitter user, said,

“When you learn what happened with massive numbers of banks closing their doors during the great depression, and financial transactions freezing entirely.. it shows how critical crypto is.”





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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

XRP

Has XRP decoupled from Bitcoin? Is it due to immense pressure from manipulators?

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Hash XRP decoupled from Bitcoin? Is it due to immense pressure from manipulators?
Source: Unsplash

Opinion: Bitcoin, the first cryptocurrency, has had over ten years to grow. However, other altcoins did not have the liberty, due to which Bitcoin exerts its dominance over almost all altcoins in the ecosystem, be it Ethereum, XRP, or Cardano. The price of altcoins generally tends to rise if Bitcoin’s price surges rapidly. The same can be said about the downtrend as well, which is why altcoins are said to be coupled with Bitcoin.

However, the recent buzz on crypto-twitter is that XRP is on the verge of decoupling from Bitcoin. A Twitter user @XRPMOONSHINE tweeted:

“DO ME A FAVOR OPEN UP A BTC/USD CHART AND AN XRP/USD CHART. THEY HAVE DECOUPLED AND ARE MOVING DIFFERENTLY.”

In a very general sense, the comparison of the price change of XRP and BTC gives a crude understanding of whether the prices have actually decoupled or not. Hence, the daily chart attached below shows the price of BTC and XRP against the US Dollar and extends from August 2018 to April 2019. The price of XRP seems to be following a lag from the price of BTC and do not necessarily mean that it has decoupled.

However, there are timeframes where the price of XRP has moved completely unrelated to that of Bitcoin. For example, the meteoric rise of XRP from September 18 to 22 was far higher than the price pump of BTC over the similar timeframe; but the drop of XRP from November 18 to December 16 was exactly the same as that of BTC’s.

Furthermore, XRPMOONSHINE suggested that XRP price was being manipulated. He tweeted:

“It is being manipulated to keep it from rising. For example look at XRP/BTC pair. Keeping it under the down sloping resistance from .80 in September. Thats what I mean by Suppressed, Although im expecting a fairly large move to the upside before 4/24/19.”

The “idea” of the price of XRP being manipulated is not unpopular within the XRP ecosystem as Peter Brandt, a famed trader, suggested the same in one of his tweets.

Brandt tweeted:



Conclusion

XRP may have started to decouple from Bitcoin, but it surely hasn’t decoupled completely. The notion that XRP is being manipulated to keep its price below certain levels can also not be confirmed without proof.





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