Coinbase CEO predicts growth in crypto in 2020

Coinbase‘s CEO and co-founder, Brian Armstrong, recently gave a prediction regarding the future of cryptocurrencies in 2020. He believes that the current drop in the stock market and numerous interest rate cuts in banks around the world will lead to growth in the crypto industry for the rest of the year.

Armstrong gave this prediction shortly after the US Federal Reserve announced that it will cut its benchmark interest rate by 50 basis points. The move was announced as an attempt to preserve the US economy amidst the new coronavirus outbreak, and was soon mirrored by Canadian central bank, as well as others.

Banks worry about coronavirus’ impact on the economy

The Federal Reserve cut is the first one that the US central bank has made since December 2008, meaning the first one since cryptocurrencies came to be. In its own statement, the bank addressed the virus, stating that it poses evolving risks to economic activity. Due to the risks, but also in support of achieving maximum employment and price stability, the Federal Open Market Committee, made a decision to lower the target range for the federal funds rate.

Jerome H. Powell, the Fed Chairman, later added that the persistence and magnitude of the virus’s effect on the US economy is extremely uncertain. As the situation remains fluid, the committee decided that the risks to the country’s outlook have changed, and with that change, the Fed is making its own changes.

A similar move was made by the Reserve Bank of Australia, which was actually the first major central bank that made such a move. Its own benchmark cash rate dropped by only 25 basis points, which still reduced the total to a record low of 0.50%.

Armstrong, who seemingly followed this development, deduced that the moves might make people seek out cryptocurrencies. He also mentioned China’s move when it printed $173B in February, noting that this could lead to inflation and that the people might turn to crypto to avoid such dangers.

And, of course, he addressed the recent falls in the global stock market, and the banks’ moves that could cause institutional investors to finally start dedicating larger amounts to the crypto sector.