The U.S. Federal Reserve has announced a significant policy change to push up inflation. Bitcoin is set to greatly benefit from this policy change. Not only the price of bitcoin could surge past $500K, but a number of companies have also begun moving their reserves into the cryptocurrency to hedge against higher inflation.

The Federal Open Market Committee announced on Thursday significant changes to its policy strategy. The announcement coincides with Fed Chairman Jerome Powells speech to a virtual meeting of the annual Jackson Hole economic symposium.

All 17 top Fed officials agreed to a policy of average inflation targeting, allowing inflation to run moderately above 2% for some period of time. This means the Fed will be less inclined to hike interest rates when the unemployment rate falls, CNBC noted. Powell said:

Many find it counterintuitive that the Fed would want to push up inflation. However, inflation that is persistently too low can pose serious risks to the economy.

While the Fed chairman did not clarify what moderately above 2% means, Dallas Fed President Robert Kaplan said Thursday that it meant inflation in a range of a 2.25% to 2.5% annual rate.

The market has been expecting Powells speech about the Feds higher inflation policy. When the bill comes due, there are two ways out, Open Money Initiative co-founder Jill Carlson opined, adding that the first is to Hurt the poor with inflation and the second is to Hurt the rich with taxation. Carlson added, The Fed just made option A the official policy.

Some people commented on Twitter that a Historic Brrrrrrrrr is incoming, referring to the sound that a money printing press makes when left running. Responding to the policy shift news, Capriole Investments founder Charles Edwards tweeted:

The beginning of the end of fiat.

Bitcoiners view the Feds announcement as bullish. Following Powells speech, a number of people took to social media to remind others of the benefits bitcoin offers. Mimesis Capital Louis Liu wrote, Powell is friend of bitcoin, while many others chimed in to just say buy bitcoin. Abra CEO Bill Barhydt commented: Bitcoin doesnt need the Fed to succeed but if they insist on throwing gasoline on the fire then so be it.

The Fed, under the leadership of Jerome Powell, continues to be Bitcoins biggest booster, Gemini Exchange co-founder Tyler Winklevoss wrote. He made a case on Thursday for a $500K bitcoin as ultimately the only long-term protection against inflation. He explained that the price of the cryptocurrency could appreciate 45 times from todays price, meaning it could hit $500K per coin or even higher. The price of BTC stands at $11,453 at the time of writing.

Some businesses have already moved their reserves into bitcoin to hedge against higher inflation. Nasdaq-listed company Microstrategy recently announced that it had converted reserves worth $250 million into bitcoin for this purpose. The company explained that it observed distinctive properties of bitcoin that led it to believe investing in the cryptocurrency would provide not only a reasonable hedge against inflation, but also the prospect of earning a higher return than other investments. Following Microstrategy, Canadian restaurant chain Tahinis converted all of its cash reserves into bitcoin while software company Snappa allocated 40% of its cash reserves into the cryptocurrency.

What do you think about the Feds new inflation policy? Let us know in the comments section below.

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Federal Reserve's Major Policy Shift to 'Push Up Inflation' Could Send Bitcoin Price to $500K - Bitcoin News