We asked ChatGPT if Bitcoin (BTC) can reach $100,000 if the US Fed cuts interest rates

TL;DR

A potential interest rate cut by the US Federal Reserve could boost the crypto market, possibly pushing BTC to a new all-time high. Some experts argue that the positive impact of the effort could be temporary, suggesting that raising the benchmark could be more beneficial for the economy. The potential pivot

The US Federal Reserve (the de facto central bank of the United States of America) is expected to cut interest rates during its next FOMC meeting scheduled for September 18. Recall that it raised the benchmark 11 consecutive times between March 2022 and July 2023 to the current level of 5.25%-5.50%.

This could have a significant impact on financial markets, including the crypto sector. Ultimately, a potential pivot will make it cheaper to borrow money, which in turn could increase investor interest in risky assets like cryptocurrencies.

Popular AI-powered chatbot ChatGPT also claimed that lower interest rates in the US may fuel a bull run for digital assets, especially Bitcoin (BTC). In fact, he estimated that the price of the main cryptocurrency could reach an all-time high of $100,000 after the effort:

“Lower interest rates often lead to improved sentiment toward riskier assets like Bitcoin. If investors expect easier monetary conditions, they may be more inclined to allocate capital to Bitcoin, which could increase its price .

However, ChatGPT cautioned that this outcome is not guaranteed and will depend on several other factors. It was assumed that a Fed pivot could weaken the US dollar, which in turn could make BTC more attractive as an alternative store of value.

General market conditions, regulatory developments, macroeconomic trends, and the level of institutional and retail demand for cryptocurrencies would also play a key role in an eventual ATH for the asset, the chatbot added.

Just a short-term effect?

Other prominent industry participants, including BitMEX co-founder Arthur Hayes, believe a Federal Reserve pivot could only benefit BTC and altcoins in the short term.

He compared the effect of this movement to the strong (but brief) boost of energy provided by sugary foods. In addition, he believes that an interest rate hike would be more beneficial for the economy:

“The Fed is getting the sugar rate cut high before the famine hits. From a purely economic perspective, the Fed should be raising rates, not cutting them.”

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