To cut rates, the Fed will increase the supply of US dollars, thus cannibalizing its value.
It’s a stark reminder that fiat money can be manipulated at will by central banks. Bitcoin cannot. Bitcoin’s total supply is hard-capped and will never increase.
While the Fed prepares to flood the market with more dollars, bitcoin is about to get more scarce with the upcoming halving in 2020. The flight to bitcoin in this scenario feels almost inevitable. Here are three reasons why.
Tomorrow, Bitcoin will experience the first Fed rate cut in its history.
— Travis Kling (@Travis_Kling) July 31, 2019
1. Low interest rates cannibalize your savings
Low interest rates are designed to encourage spending and investing, not saving.
Think about it like this. The best savings accounts in the US only offer ~1.9 percent interest. If the Fed cuts, you can expect that to go lower.