The coronavirus has kept the global economy immobile for quite some time. People are out of work, economic activities were halted, and businesses were forced to shut down. The Federal Reserve has pushed to provide more new money for the people and businesses in the hopes of putting the economy on pause. If the economy does not recover quickly, what is next for the Fed?

The COVID-19 measures caused the jobless rate in America to jump to 13% and more than 16 million Americans have already filed unemployment benefits. To remedy the waning supply of cash, $3 trillion of new money was put to circulation by the Fed so far this year. However, this will be a boon only for the short term. Increased money supply will essentially debase the US dollar, reducing purchasing power and heightening inflation.

The Fed’s money-printing exercise (quantitative easing or QE) has pushed bitcoin’s price as more investors want to protect themselves against inflation. BTCUSD is up by 44% since March 23 when the Fed cut the benchmark interest rates to nearly zero. BTCUSD is trading at $9387 as of writing.

According to Former Fed Chair Ben Bernanke, the Fed’s QE efforts “can substitute for further rate cuts.” Fed officials were thrown with questions about the chance to go negative after reducing the interest rates close to zero. However, the economic projections by the Fed officials last week indicate not going to negative grounds.

though negative rates will eventually push inflation higher, it is attracting the attention of more foreign banks like the Bank of England and European Central Bank. According to Resenblum, co-founder of GSM, negative rates will likely be more bullish for bitcoin because people may see negative rates as an indication of something “being broken.” Paul Tudor, the founder of Tudor Investment Corporation, joined the bitcoin bandwagon last month, saying that bitcoin could be a hedge against inflation.