The Fed is back! They'll hold their next meeting on September 18, 2024, and it looks like they'll be playing with the interest rate again. And here's what's interesting: experts are already at a low start, predicting a 50 basis point cut. How will this affect Bitcoin? 🤔 Let's figure it out.
What's up with the interest rate?
The Fed has been holding the rate at 5.5% since July 2023. But then Jerome Powell (chairman of the Fed) recently said: "Time to change policy, guys!" 👀 Well, that's almost what he said. And the markets are already waiting. 📉
The Fed rate isn't just a number. It's actually the cost of money. The lower the rate, the cheaper the loans, the more money flows into the economy. And, as you might have guessed, high-risk assets like Bitcoin start to jump. 🎢
Expectations of rate cut
Bitcoin is currently trading at $59,113, and many experts are confident that the rate cut will lead to its growth. Kirill Khomyakov from Binance 💰 said it directly: rate cuts are an influx of liquidity. And cryptocurrencies will be among the first to feel this money rain. 💸
By the way, remember that from February 2020 to February 2022, when rates were almost zero, Bitcoin soared by 375%! So if there is another decline, get ready for another rocket. 🚀
What if the rate drops by 0.5%?
This is where opinions are divided. Some analysts (for example, from 10x Research) believe that a sharp decline could even hit Bitcoin. Why? It could be a sign that the economy is in deep shit and the Fed is trying to put out the fire urgently. And that, you know, is not always good for risky assets. 🔥
When to expect the effect?
Pavel Savich from Yieldfort says that the rate cut may not immediately affect the price of Bitcoin. He says that first we need to wait until the rates stabilize, and then, in six months, we can expect the effect. So, relax - this is a marathon, not a sprint. 🏃♂️
Pre-meeting volatility
In general, the closer the Fed meeting, the more jumps in the market. On September 13, Bitcoin volatility has already jumped by 8 points! 😲 And this is not the end. Options are jumping, traders are nervous, and ETFs are ready for new fluctuations.
It all sounds like the beginning of a big crypto show. 🎬 The end is coming soon - let's keep an eye on the Fed and see how Bitcoin reacts to all this dance with interest rates.
By the way, what do you think? How do you prepare for possible changes? 💥
