Bitcoin demand in the U.S. surged following the Federal Reserve’s indication of a potential interest rate cut.
The Coinbase Premium Index spiked to its highest level since July, reflecting increased buying activity among U.S. investors.
Bitcoin’s price rose by 5.45% to $64.28K, leading a broader crypto market rally
Bitcoin demand in the United States surged on Friday after the Federal Reserve signaled a forthcoming cycle of lower interest rates, according to Julio Moreno, the head of research at Cryptoquant.
#Bitcoin demand in the US spiked today as the Fed signaled the cycle of lower interest rates will begin. Price premium on Coinbase is the highest since July (green line). pic.twitter.com/X4RREm3Uxb
— Julio Moreno (@jjcmoreno) August 23, 2024
This shift in monetary policy has led to a sharp increase in demand among U.S. investors, pushing the Coinbase Premium Index to its highest point since July.
Notably, the Coinbase Premium Index tracks the price difference of Bitcoin between the Coinbase exchange and other global platforms. On August 23, this metric spiked to 0.114, indicating that U.S. investors are paying a premium for Bitcoin on Coinbase.
Moreno’s chart highlighted the rising premium, suggesting heightened buying activity on Coinbase. This increase is likely driven by investors’ expectations that Bitcoin could serve as a hedge against the potential devaluation of the U.S. dollar and lower returns from traditional investments.
Prior to this recent observation, Moreno noted on Thursday that global demand for Bitcoin was subdued, although some metrics remained strong.
Historically, spikes in the Coinbase Premium have often coincided with upward movements in Bitcoin’s price, and today’s surge appears to be following this trend. According to the latest data, Bitcoin’s price reached $64.28K at the time of this report, marking a substantial 5.45% increase over the last 24 hours.
Bitcoin’s rally has also positively impacted the broader crypto market, which has seen a 4.14% increase to $2.26 trillion today, adding $93.57 billion. Among the top performers in the market is Solana (SOL), whose price has risen by over 10% today, trading at $157.
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