How the Fed’s $400 billion cash injection will affect Bitcoin

The Federal Reserve Bank is pumping hundreds of billions of dollars into the economy by the end of January. The cash injection is to make sure that banks have enough money to keep running. 

So-called repos—market repurchasing agreements—are a way for central banks to regulate the economy and keep interest rates in check. The Fed sells government securities—like bonds—to banks, promising to buy them back a short while later. Unlike traditional bonds, which can take years to mature, repos are bought back overnight.

They’ve gone out of fashion for over a decade—the Fed used them for the first time since the 2008 financial crisis. But on Thursday, the Fed announced it was pumping yet more cash into the economy. By February, overnight repos would add over $400 billion into the economy. 

The Fed’s strategy has angered those in the crypto community who take offense with the central bank’s intervention in the market, which they claim is similar to the controversial…