Will Bitcoin catch the wave?

Over the past month or so, Bitcoin has fallen while the Nasdaq and S&P 500 have gained. Will moose return after spikes boost cash markets overnight?

Bitcoin is down 6% for the 30 days ending Friday, September 13, while the Nasdaq Composite is up 3.7% for the month and the benchmark S&P 500 is up 4% during the same period.

So what’s up with Bitcoin?

Is Wall Street putting bearish selling pressure on crypto prices with exits from Bitcoin ETFs and going to buy with the money for NVDA, TSMC and ASML to bet on the chips and let Redditors figure out the rest?

Are Bitcoin Miners Selling to Keep Up With Rising Industrial Electricity Costs Since April?

Goldman Sachs Economist: 25 – 50 Basis Pt Cut

“I wouldn’t rule out 50 basis points, but 25 basis points seems more likely to me,” Goldman Sachs chief economist Jan Hatzius said on Monday. “I think there’s a strong reason to do that (a 50 basis point cut). And the reason is that five and three-eighths five and a quarter to 5.5 percent is a very high federal funds rate. It’s the highest political rate in the G10”.

Hatzius added that the US has seen more progress in inflation than most of the G10.

Will Bitcoin Price Rise When Fed Cuts Rates?

Past results are no guarantee of future performance, but history tends to repeat itself and winners tend to win again. The US benchmark interest rate is a macro tide that lifts big ships like hot Wall Street stocks and the decentralized Internet economy of Bitcoin.

Low rate macro environments of the past have been correlated with massive Bitcoin gains. The period of most stellar ROIs for BTC holders was during the 2010s when rates were low before BTC’s line started on the chart below.

When rates dropped to zero in 2020, the price of Bitcoin rose almost 8x to all-time highs. As the Fed raised rates, Bitcoin settled to double its pre-pandemic level. At the end of 2023, the Fed simply stopped raising rates and BTC went mad.

Now there’s the crypto news cycle that was a big part of it, with years of anticipation for a Bitcoin ETF that was starting to take off at the time. But the multi-month correlations with monetary policy are close and consistent with the theory of economic supply and demand.

Bitcoin and the Fed Funds Rate | Commercial view:

Bitcoin’s last three four-year supply cycles saw huge rallies with 12- to 18-month high prices. after the half Bitcoin’s most recent halving took place on April 19.

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