The United Kingdom'south central bank has followed the Federal Reserve in all of a sudden cut interest rates — by the most since 2009.

As various news outlets including the Financial Times reported on March 11, the Bank of England (BoE) said the move was in direct response to economic pressures posed by the ongoing coronavirus outbreak.

The UK aims to "support confidence"

The publication quoted a statement as saying:

"The reduction in Banking company Rate will assist to back up concern and consumer conviction at a difficult time, to eternalize the cash flows of businesses and households, and to reduce the cost, and to improve the availability, of finance."

The move takes the BoE base rate to but 0.25%, a reduction of 0.v%. The Fed charge per unit is now 1.25%, with more cuts forecast this yr.

The pound immediately reacted, shedding 0.five% confronting the United states of america dollar, to subsequently recoup some of the losses.

While Bitcoin (BTC) failed to react, supporters of the cryptocurrency maintain that stimulating spending and borrowing by lowering rates is just i practice laying the foundation for the long-term ruin of the fiat economy.

To avoid recessions, a key fear of Keynesian economists, governments aim to increase spending while applying incentives such as revenue enhancement cuts for businesses.

Additional spending confronting a backdrop of less income can simply happen via the use of measures such as increasing the money supply, further pejorative fiat currencies.

Bollinger: BTC safe haven is "psychological"

Nonetheless, Bitcoin's lackluster reaction to the coronavirus crunch caught many by surprise. Among them was John Bollinger, creator of the Bollinger Bands trading indicator, who on Tuesday said that recent losses were unexpected.

"Bitcoin barbarous victim to the COVID-19 panic. I truly did not run across that coming, I idea it might act as a condom haven nugget," he tweeted.

In some other post, he added:

"Prophylactic-oasis-ness is a matter of perception, not fact. If an asset is thought to be a safe haven, information technology is. The thing is entirely psychological."

BTC/USD traded at around $7,870 at press time, down 0.iv% on the day after briefly rising above $eight,000.