In the recent financial market turmoil, the Federal Reserve announced the implementation of unlimited quantitative easing (QE). This news was like a bombshell, stirring up huge waves in the market. At the same time, the price of Bitcoin also rose rapidly by 10% driven by this news, triggering heated discussions and thinking about the financial market. This article will conduct a detailed analysis of the Fed's unlimited QE policy, the reasons and impacts behind the rise in Bitcoin prices, and take you to explore the ups and downs of the financial market.

The Fed's unlimited QE policy is one of the hottest topics in the current financial market. As the global economy is hit by the new crown epidemic, central banks around the world have introduced stimulus policies to stabilize the economy. The Fed's announcement of unlimited QE aims to inject liquidity by purchasing treasury bonds and other financial assets to maintain the stability of the financial market. This policy measure has achieved certain results in the short term, boosting market confidence, and the prices of various assets such as the stock market and bond market have also rebounded. However, the unlimited QE policy has also caused people to worry about inflation, asset bubbles and other issues, and the market is full of uncertainty about future trends.

At the same time, as a decentralized digital currency, Bitcoin's performance in the financial market has attracted much attention. The price of Bitcoin quickly rose by 10% after the Fed announced unlimited QE, which once again triggered heated discussions about Bitcoin in the market. On the one hand, Bitcoin is regarded as a safe-haven asset. Investors tend to turn their funds to encrypted digital currencies such as Bitcoin to avoid risks when the market is turbulent. On the other hand, the limited supply of Bitcoin, coupled with its growing recognition and demand, has also become an important factor driving its price increase. Therefore, Bitcoin plays an increasingly important role in the financial market, and its price fluctuations also touch the hearts of global investors.

From a broader perspective, the Fed's unlimited QE policy and the rise in Bitcoin prices reflect some deep-seated problems and trends in the current financial market. On the one hand, against the backdrop of large-scale stimulus policies adopted by global central banks, market liquidity is abundant and asset prices have fluctuated significantly. On the other hand, the rise of emerging digital currencies such as Bitcoin also highlights people's dissatisfaction with the traditional financial system and their pursuit of decentralization and security. In this rapidly changing financial environment, investors need to remain vigilant, look at market fluctuations rationally, and make correct investment decisions.

In general, behind the Fed's unlimited QE policy and the rise in Bitcoin prices are the turbulence of the financial market, which are challenges and opportunities facing the global economy. Investors need to keep a clear head, assess the situation, and grasp the pulse of the market to cope with the ever-changing situation. Only by constantly learning and adapting can we remain invincible in this era full of opportunities and risks. May we all find our own lucky door in this feast of the financial market.

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On the evening of March 23rd, Beijing time, the Federal Reserve announced a new round of large-scale rescue measures before the stock market opened, including unlimited bond purchases to keep borrowing costs low and plans to ensure that credit flows to businesses and state and local governments.

The Federal Reserve said it would purchase $75 billion in Treasury bonds and $50 billion in agency mortgage-backed securities (MBS) every day this week, and the daily and term repo rate quotes would be reset to 0%.

Stimulated by this news, the three major U.S. stock index futures rose instantly, and Bitcoin rose by more than 10% in just two hours, from $5,800 to $6,600.

In response, Hong Hao, managing director of Bocom International, commented on the social platform, saying that the Federal Reserve had placed all its bets tonight, and the global market was jubilant.

However, the U.S. stock market did not buy it after the opening, and the S&P 500, Nasdaq Composite Index and Dow Jones Index all fell sharply.

Faced with the widespread spread of the epidemic and the collapse of financial markets, the Federal Reserve has launched a series of rescue measures in the past week, not only lowering the benchmark interest rate to zero and announcing quantitative easing (QE) of up to US$700 billion, but also using the three major policy tools used in the 2008 financial crisis within two days, namely the Commercial Paper Funding Facility (CPFF), the Primary Dealer Credit Facility (PDCF) and the Money Market Mutual Fund Liquidity Facility (MMLF).

At present, the above measures have failed to effectively prevent the stock market from plummeting, and the three major US stock indexes have wiped out all the gains since Trump took office.

At the same time, Bitcoin failed to reflect the value of safe-haven assets in the face of crisis. The new coronavirus epidemic has caused stock markets in many countries to plummet, and concerns about the global financial crisis are increasing day by day. Bitcoin has fallen by more than 50% in two days and more than 60% in a week, and has been completely defeated. The difference in risk resistance is vividly reflected.

(Comparison of the trend of Bitcoin and the S&P 500 index from December 2019 to March 2020)

Previously, many Bitcoin believers liked to use Nietzsche's "What cannot be killed, only makes me stronger" to describe Bitcoin's tenacious vitality, but there is another saying: Don't commit suicide, you won't die. Another important reason for the Bitcoin crash this time is that almost all participants have heavily leveraged to bet on the halving bull market. When the Bitcoin price drops to a certain threshold, the leverage is blown up, and the liquidity is instantly exhausted, leading to a series of liquidations.

Since its birth, the price of Bitcoin has risen from 0 to the current $6,000, and the market value has reached $100 billion. The premise for Bitcoin to achieve such remarkable results is that the world has just emerged from the 2008 financial crisis, and the over-issuance of currencies in many countries and the government's water release have led to the depreciation of legal currencies. Bitcoin has enjoyed a good life for 10 years.

When this major premise is removed, all the myths of Bitcoin's rise are shattered in an instant, and Bitcoin's good days are over.

From this point of view, when the global economy (note that it is the world, not a local country or region) faces the risk of recession, Bitcoin will amplify the risk. As the epidemic is brought under control and the global economy begins to prosper again, the safe-haven property of Bitcoin relative to legal currency may begin to play a role.