September did not start well for the cryptocurrency market although this week there was a clear appetite for risk driven by US economic data which point to the Federal Reserve cutting interest rates by 25 points next week. Thus, Bitcoin manages to exceed US$60,000.
Why rate cuts could be the catalyst for Bitcoin price?
According to a report by Buenbit, the last time the Fed lowered rates, BTC was trading around $8,000 and after that event and the increase in liquidity in the markets, its value skyrocketed to reach a new all-time high of $68,000 in November 2021. In addition, this week institutional interest grew with significant inflows into Bitcoin and Ethereum ETFs.
“What is usually positive for Bitcoin is also positive for the crypto market. A positive outlook for cryptocurrencies is anticipated in the short and medium term due to increased liquidity and risk sentiment because with lower interest rates, fiat currencies could be devalued, which would reinforce the narrative of Bitcoin as a store of value or hedge against inflation,” Buenbit analysts stated.
What the debate between Donald Trump and Kamala Harris left behind
Total silence in the debate regarding cryptocurrencies: Neither Kamala Harris nor Donald Trump mentioned the crypto industry during Tuesday’s presidential debate, indicating that digital assets may not be a priority in political discussions.
However, Standard Chartered, A multinational bank based in London, UK, noted in a report that while the outlook for Bitcoin is positive with both candidates, with a victorious Trump, the changes in favor of the crypto sector will happen much faster than with Harris in the presidency.
According to Standard Chartered analysts, the main cryptocurrency will be heading towards new annual highs by the end of 2024. However, the magnitude of the increase will vary as follows: in case Trump is the winner, They project Bitcoin to be close to $125,000 per unit. On the other hand, if the winner is the Democratic candidate, Harris, the BTC could be around US$75,000 per unit.
Buy the Dip?
The week thus ends on a positive note for cryptocurrencies and their spearhead, Bitcoin. With potential catalysts for its price in sight, such as the cut in interest rates and the presidential election in the US, It seemed like it was just a matter of time before the digital currency saw a sharp jump in price.
For that reason, This would be a great opportunity for investors who believe in Bitcoin’s long-term adoption story, according to Buenbit. Furthermore, if US interest rates return to the 2% range, or even lower, a more liquid environment will almost certainly be a long-term boost to the BTC price. A Bitcoin price of $100,000 sometime in 2025 remains highly likely.
Source: Ambito
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