The Fed Rate Hasn’t Even Dropped

The Bitcoin price is soaring to new all-time highs, and the federal funds rate for borrowing U.S. dollars has not even started to drop. The last time Bitcoin’s price soared this high, the dollar supply was at high tide, and the Fed held rates down low. This time, it did it without low rates.

James Butterfill, head of research at digital asset management firm CoinShares, recently told ABC News “the price surge has coincided with a period of stubbornly high interest rates, suggesting that the jump in demand owes little to excess cash in search of a place to land.”

When this changes, most likely in 2024, Bitcoin’s deflationary shelter from the Federal Reserve becomes a huge source of demand for the cryptocurrency while it enjoys the same boost of investment that tech stocks get from the glut of cash and the cheap borrowing of a low-interest rate regime.