Entrepreneur Tyler Winklevos believes Bitcoin (BTC) will get most of the price support from the Fed itself.

In a tweet on Aug. 25, the Gemini Stock Exchange co-founder argued that the Fed’s policies are and will continue to boost Bitcoin wealth.

Rising inflation is a boost for Bitcoin
The reason for this is that the central bank will mistakenly make Bitcoin more attractive and the dollar less attractive due to the impact of coronavirus containment measures across the U.S. economy, Winklevos said.

On Thursday, Federal Reserve Chairman Jerome Powell will deliver a speech that commentators expect to include an announcement that inflation may rise significantly.

This alone makes Bitcoin, which has an immutable issue and delivery, immediately attractive.

“The Fed under Jerome Powell continues its role in promoting Bitcoin,” wrote Winklevoss.

“On Thursday he will give a speech on how the Fed will begin to target higher inflation.”

As Cointelegraph reported, expectation that the Fed would inadvertently block safe havens like gold and bitcoin has increased as both assets see price increases in line with the rise in central bank balance sheets.

Earlier this month, Edward Yardeni, head of Yardini Research, said higher inflation targets for the precious metals would be “very bullish”.

Bitcoin price, inflation and stock flow chart

Bitcoin price, inflation and stock flow chart. Source: Woobull

More years at 0% interest
Meanwhile, Bloomberg stated that interest rates should stay near zero for five years, with longer periods likely not to be ruled out.

This would mimic behavior after the global financial crisis of 2008, when interest rates remained unchanged near 0% through the end of 2015.

“I wouldn’t be surprised if interest rates are still zero in five years,” former White House chief economist Jason Forman told the newspaper.

Historic Federal Reserve interest rate chart

Historic Fed interest rate chart. Source: Bloomberg

The Fed has so far turned away from negative interest rates and moved away from the practice that has existed for several years under the auspices of the European Central Bank (ECB).

In May, a report argued that Bitcoin was a natural focus for fund managers to help cushion the effects of this fiscal policy.

Source: CoinTelegraph