📊Fed rate cut history and Bitcoin: past, present and future
💡Fed rate cuts have had a profound impact on global markets, especially #Bitcoin. By analyzing past and current rate cut events, we can better predict future trends.
1️⃣July 2019 rate cut
🔹Background: The Fed's first rate cut since 2008 was aimed at responding to the global economic slowdown.
🔹Data: Bitcoin reached about $13,000 before the rate cut, fell back to about $10,130 after the rate cut, and fluctuated slightly in the following weeks, falling to as low as $9,500, but overall remained above $10,000.
📈Chart 1: The left chart shows the price trend of Bitcoin during this period, and short-term fluctuations can be seen.
2️⃣Two emergency rate cuts in March 2020
🔹Background: The outbreak caused panic, and the Fed cut interest rates by 0.5% on March 3, cut interest rates by 1% again on March 15, and launched quantitative easing policies.
🔹Data: Bitcoin was $8,750 on March 3, plummeted to $4,000 on March 12, and then reached $29,000 at the end of the year.
📊Chart 2: The right chart shows the price changes of Bitcoin in March 2020, clearly reflecting the sharp market fluctuations and subsequent recovery process.
3️⃣ Expectations of Fed rate cuts in 2024
🔹Background: After several rate hikes, the market currently expects the Fed to start cutting interest rates in September 2024 to respond to potential economic slowdowns.
🔹Current market reaction: As expectations of rate cuts heat up, investment interest in risky assets such as Bitcoin has increased again, and investors are looking for assets to hedge against inflation and economic uncertainty. Although the market may still fluctuate in the short term, the rate cut policy may once again lay the foundation for Bitcoin's long-term rise.
📊Chart 3: Current market chart
🔮Summary and outlook
📌The Fed's interest rate cuts often cause volatility in the short term, but in the long run, the trend of loose monetary policy driving Bitcoin's rise remains strong. The current expectation of interest rate cuts has brought new momentum to the Bitcoin market and is worthy of attention.
