Bitcoin is about to become a hot asset as the US central bank goes ahead with its pseudo-quantitative easing program, believes a few bigwigs.

Travis Kling, the chief investment officer at California-based Ikigai Asset Management, called bitcoin “an insurance policy” against Jerome Powell’s decision to resume Treasury purchases. The Federal Reserve chairman on Tuesday confirmed that they would purchase short-term bonds to expand their balance sheets.

Fed’s move, according to Kling, signals a liquidity crunch in the US market, which means the central bank is injecting a fresh supply of dollar-denominated assets to stimulate the US economy. It is an equivalent of quantitative easing (QE).

“Welcome to QE4,” tweeted Kling.

"I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs."

-Jay Powell, today Bitcoin is an insurance policy against monetary & fiscal policy irresponsibility. Welcome to QE4. — Travis Kling (@Travis_Kling) October 8, 2019

Fed: Everything is Fine

Powell refused to call the Treasury Purchase a QE program, stating that it is nowhere the same as the crisis-era program launched after the 2008 financial crisis.

“I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis,” he told the National Association of Business Economists.

The weight of the Fed’s decision is going to fall on an oversupplied US dollar – at least in the short-term. Moreover, another factor that could further weaken the greenback is Powell’s inclination towards another rate cut.

The Fed chief coupled his Treasury-buying announcement with another inflationary news. He said the Fed could cut benchmark rates by 25 bps at the next Federal Open Market Committee meeting. That shows that Powell is adding more insurance against market uncertainties caused by, as he said, “trade, Brexit, and other issues.”

Meanwhile, staunch bitcoin skeptic and gold bull Peter Schiff said that Fed’s latest decisions proved that the US economy is in bad shape. The Euro Pacific Capital CEO tweeted:

Within a few months it's likely that the Fed's balance sheet will exceed the $4.5 trillion peak it hit prior to the Fed doing QT. Sometime in 2020 the Fed's balance sheet will grow beyond $5 trillion, and will likely keep growing indefinitely. But don't worry, it's not QE! — Peter Schiff (@PeterSchiff) October 8, 2019

“If it looks like a duck, walks like a duck, and quacks like a duck, it’s a duck. No matter what Powell claims, the Fed is doing QE, as I predicted it would. The goal is to suppress interest rates to sustain debt and asset bubbles. The only difference is this time in won’t work!”

Unlike Kling, Schiff thinks Gold would beat bitcoin in terms of gains against a weaker dollar.

China’s Most Recent Gold-Buying Spree Tops 100 Tons @schiffgold https://t.co/NfehkgGAR2 — Peter Schiff (@PeterSchiff) October 8, 2019

A “Rocket Fuel” Bitcoin Rally

Sweden-based Youtuber Ivan on Tech sided with Kling on his upside prediction for bitcoin. He said the news of the Fed’s bond purchasing program could “rocket fuel” the cryptocurrency.

FED: starts QE

Also FED: This is definitely NOT QE NEVER BELIEVE ANYTHING UNTIL IT IS OFFICIALLY DENIED This is Bitcoin Rocket Fuel ?https://t.co/6fmJ9O03v4 — Ivan on Tech (@IvanOnTech) October 9, 2019

Meanwhile, Priya Misra of TD Securities stressed that Powell’s program appears a lot like QE, but it is not one.