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A comment on BadEconomics: Putting $400M of Bitcoin on your company balance sheet. Parent comment

Re:BadEconomics: Putting $400M of Bitcoin on your company ba... by JumpCrisscross on Monday January 04, 2021 @12:09PM (#25634302)
> the Fed _hasn't_ been buying BTC, and therefore hasn't artificially propped up its price. The same can't be said for stocks, real estate, or anything else available on equity markets.

The Fed isn’t buying most equities. The monetary transmission channel for equities is exactly the same as Bitcoin’s.

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Re:BadEconomics: Putting $400M of Bitcoin on your company ba... by CapmCrackaWaka on Monday January 04, 2021 @12:34PM (#25634846)
> The monetary transmission channel for equities is exactly the same as Bitcoin’s.

Can you explain what you mean by this? From my understanding the fed has been buying corporate bonds and ETFs directly. I shouldn't have said the Fed is buying 'anything else available on equity markets'.

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Re:BadEconomics: Putting $400M of Bitcoin on your company ba... by JumpCrisscross on Monday January 04, 2021 @12:47PM (#25635061)
> Can you explain what you mean by this? From my understanding the fed has been buying corporate bonds and ETFs directly

The Fed has been buying bond ETFs as a way to buy bonds. (Bonds are illiquid, and a whale like the Fed buying them individually can create artefacts.)

When the Fed buys it puts the asset on its balance sheet and gives the seller money. That money can then be spent or re-invested. Spoiler: it's been getting re-invested. That is the transmission channel from the Fed's buying to other asset prices, e.g. stocks and non-target bonds and Bitcoin and beanie babies.

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