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We have seen a significant shift in the spread between the yields on 10-year and 2-year US Treasury bonds, moving from negative to positive to reach 0.18%. This shift may seem to some to be a sign of improved market expectations for the US economy, especially after the Federal Reserve’s recent decision to cut interest rates by half a percentage point.
This major decision by the Federal Reserve may open the door to additional monetary easing in the future, which could lead to higher long-term yields. For me as a Bitcoin investor, I see these developments as encouraging for several reasons:
First, if the Federal Reserve continues to cut interest rates, the dollar may weaken, making Bitcoin a more attractive option as a safe haven against inflation. Second, lowering interest rates means pumping more liquidity into the markets, and this liquidity may find its way into digital assets such as Bitcoin, increasing demand for them. Finally, in light of the volatility of traditional markets, investors may resort to Bitcoin as a means of hedging, which of course supports its price increase.
Simply put, the shift in the yield curve and the Fed's rate cut are a good opportunity for Bitcoin's price to rise in the coming period.
