U.S. Federal Reserve—the Key Player in Bitcoin's Race to $100k: Analyst
Summary:
The future record-breaking performance of Bitcoin hinges primarily on the actions of the U.S. Federal Reserve, according to Timothy Peterson, founder and financial manager at Cane Island Alternative Advisors. Peterson suggests that a reduction in the U.S. high yield rate to below 6 or 7% is critical for Bitcoin to accomplish a new all-time high. He predicts if the yield rates decrease to this level, Bitcoin could potentially reach the $100,000 mark by late 2024 or mid-2025. However, other analysts warn that economic uncertainties, particularly around the U.S. elections, could create market volatility.
One market commentator suggests that the future record-breaking performance of Bitcoin (BTC) hinges purely on predictions surrounding the U.S. Federal Reserve's actions. “A reduction in the U.S. high yield rate to something below 6 or 7% is critically important for us to see another all-time high,” said Timothy Peterson, founder and financial manager at Cane Island Alternative Advisors, in an exchange with Cointelegraph. Peterson posits that the determinant factor for Bitcoin's price progression lies in the fluctuations in interest rates. Currently, the U.S. high yield rate, a gauge for the default risk of high-yield corporate bonds, stands at 7.54% according to YCharts data. Peterson anticipates that if the yield rates tumble to “6 or 7%”, Bitcoin could potentially reach the eagerly awaited $100,000 mark by the end of 2024 or, at the latest, by midway through 2025. Normally, a decision by the Federal Reserve to slash interest rates tends to pull down the high yield rate. Around two-thirds of surveyed economists are predicting this scenario for September this year, according to a recent Reuters poll. Interest rates are a key marker for crypto traders, as diminishing rates often mean decreased yields for investors in secure investments like bonds and term deposits. Consequently, more investors could be lured toward riskier assets such as Bitcoin, seeking improved returns. Bitcoin is currently valued at $61,871, reflecting a decline of 5.08% over the past 30 days. Peterson believes that markets usually experience periods of stagnation and volatility in September and October. He suggested that with the imminent U.S. elections, there may be increased uncertainty in the lead-up to, currently scheduled to be held on November 4. Meanwhile, crypto commentator, Scott Melker, also referred to as "The Wolf of All Streets," maintains that the Federal Reserve slashing interest rates doesn't always bode well for assets other than fixed-income investments. In a post on May 14, he noted that rate cuts often herald considerable declines in the broader market. As with all investment decisions, this article advises that individuals conduct their own due diligence and remember that all investments carry inherent risks.
Published At
5/15/2024 9:03:51 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.