💥💥💥 #bitcoin☀️ and Crypto to Gain as Falling Rates Expand Global Liquidity, Says 21shares VP
Impact of Interest Rates on Bitcoin and Market Dynamics
- Eliézer Ndinga, Vice President and Head of Strategy and Business Development at 21.co, the parent company of 21shares, recently shared insights on how interest rates and market dynamics influence Bitcoin. 21shares is one of the world’s largest issuers of cryptocurrency exchange-traded products (ETPs). On Wednesday, the Federal Reserve decided to maintain the benchmark interest rate at 5.25% to 5.50%.
Market Reaction to Fed's Decision
“Bitcoin traded down about 3% a day after the Fed held interest rates steady. The selloff was broad-based, with the Nasdaq, S&P 500, and gold also declining,” Ndinga stated. He attributed the market's reaction to:
1. Geopolitical Tensions: Increasing geopolitical tensions in the Middle East and fears of escalating conflict have prompted a temporary flight to safety amid geopolitical uncertainty.
Resilience of #BitcoinETFs
Ndinga also highlighted the resilience of the U.S. Bitcoin exchange-traded fund (ETF) market despite the broader selloff. “U.S. Bitcoin ETF inflows remain strong despite the market selloff, with approximately $170 million in net inflows over the past week and over $18 billion in inflows since their launch in January,” he noted.
Interest Rate Outlook
Addressing the outlook on interest rates, Ndinga pointed to market expectations for future rate cuts. “The market is fully pricing in a rate cut in September & a roughly 90% probability of further rate cuts in November & December, according to the CME Fedwatch Tool,” he said. He concluded:
“Falling rates may lead to global liquidity expansion, which is positive for risk assets like Bitcoin & crypto.”
Ndinga's insights underscore the complex interplay between macroeconomic factors, geopolitical developments, and the #cryptocurrencymarket , highlighting the importance of monitoring these dynamics for informed investment decisions.
Source - news.bitcoin.com
