Bitcoin and cryptocurrency will be front and center in an upcoming client call hosted by investment banking giant Goldman Sachs. Scheduled for Wednesday, May 27th, the conference call, dubbed the “US Economic Outlook & Implications of Current Policies for Inflation, Gold and Bitcoin,” will focus on macro economic trends and how they impact financial markets.
On Thursday, the Federal Reserve announced a record-breaking balance sheet of $7.09 trillion for the week ending May 20, up from $6.98 trillion the previous week. The changing economic winds have painted a dramatic landscape with seemingly limitless money printing that has caused institutional investors to turn increasingly to gold while also investigating the emergence of Bitcoin.
US Federal Reserve Chairman Jerome Powell has already warned that upcoming economic data for the second quarter will be the worst the country has ever seen. But in a recent 60 Minutes interview, Powell also spoke about the Fed’s broad powers to push back against the brutal tide that has wiped out jobs and threatened equities amid the pandemic.
According to Powell,
“There is a lot more we can do. We’re not out of ammunition by a long shot. No – there’s really no limit to what we can do with these lending programs that we have.”
Extreme monetary policy by central banks has set the stage for Goldman Sachs to discuss quantitative easing, the risk of monetary inflation and how the global economy is positioning assets like Bitcoin and gold.
While gold has increased in value since the spread of the coronavirus – with analysts predicting that the asset may hit a record high by the end of the year – Grayscale, one of the leading digital currency asset managers, points to a changing outlook on Bitcoin.
BTC got a major boost from Paul Tudor Jones, a leading hedge fund manager, who revealed earlier this month that he has a firm crypto investment strategy in place, allocating 1-2% of his assets in Bitcoin.
Reports Grayscale in a newsletter to investors,
“Jones emphasized Bitcoin as a portfolio hedging tool to combat the rapid expansion of the Fed’s balance sheet and untenable global debt levels. In fact, in sharing his conviction in Bitcoin, Jones also explored various assets to combat inflation, including gold, equities, treasuries, commodities, and currencies. In his note, Jones succinctly stated, ‘If I am forced to forecast, my bet is [on] Bitcoin.’”
Topping $7 trillion, the Fed’s balance sheet doubled in the first quarter of 2020 after the central bank printed over $3 trillion through rescue packages and quantitative easing.
As for applying a more conservative approach to managing the current crisis, Powell says that now is not the time.
“This is the time to use the great fiscal power of the United States to do what we can to support the economy and try to get through this with as little damage to the longer-run productive capacity of the economy as possible.”
The Goldman call will be hosted by the company’s chief Investment officer, Sharmin Mossavar-Rhami; Harvard Kennedy School economics professor and former chair of the Council of Economic Advisers, Jason Furman; and Goldman’s chief economist and head of global research, Jan Hatzius.