Bitcoin has crossed the 42k-dollar market after the US Federal Reserve decided to maintain the interest rate at 5.5%.
The call was interesting, given that the job market and growth rate have slowed down. The Fed noted that inflation has eased despite exceeding its 2% target. Experts suspect these signs hint at the Fed cutting interest rates by up to 75 basis points in 2024.
Given the direct correlation between BTC and The Fed’s interest rate policies, the estimates intrigued most crypto traders. Bitcoin future predictions became a common topic of interest as BTC has gained 17% value in the past month alone.
The Fed’s interest rate decision had a tremendous influence on BTC’s market value, as expected. Bitcoin had been trading around the $41,000 mark for some time prior to the Fed’s announcement.
Expectations that a Bitcoin ETF (Exchange Traded Fund) will soon receive approval from US regulators were the driving force behind its most recent jump to 42,000 dollars. If done so, the BTC market will be open to millions of new investors worldwide.
Furthermore, predictions that the Federal Reserve’s interest rate hike cycle has ended encouraged riskier assets in the market. Investors anticipate that an interest rate reduction in early 2024 will make assets like Bitcoin more appealing.
This pattern occurs because traditional investors see interest rate cuts as a sign of a healing economic metric. It prompts them to opt for high-risk, high-reward assets, such as crypto. Given Bitcoin’s status as the biggest crypto, it is most likely to gain from the development.
Above all, the most recent trend has demonstrated that global monetary policies have an impact on even Bitcoin. The situation shows how investors perceive BTC in their portfolios, especially during uncertain market conditions.
Source: https://www.cryptonewsz.com/bitcoin-gains-as-fed-hints-at-potential-rate-reduction/