Will Bitcoin Price Surge if Fed Cuts Rates Amid ETF Approvals?
This week’s Federal Reserve Open Markets Committee meeting could reveal when the Fed will cut rates, which could have implications for Bitcoin exchange-traded fund (ETF) strategies. Despite favorable jobs and economic data, Inflation has not dropped the Fed’s 2% goal, making this week’s announcement tricky for Chairman Jerome Powell.
When the Federal Reserve meets from Tuesday to Thursday, it is expected to decide whether to keep the federal funds rate elevated or change it. Experts mostly agree that the US may not enter a recession, but the timing of when the Fed starts to cut rates will play a crucial role for Bitcoin and stocks in 2024.
Economists Say Fed Target Still Elusive
Speaking on Bloomberg Wall Street Week on Friday, PIMCO Multi-Asset Strategies Portfolio Manager Erin Browne said that before US jobs numbers came out, some investors were pricing in a 1.27% reduction in interest rates next year. Later, they tempered their expectations as the jobs report revealed increasing wage growth and portending rate cuts in the fourth quarter.
“But right now, at least, I’m not pricing in a recession for next year, but I do expect a slow growth environment in the US with the potential for recession risk, particularly outside of the US, that could open the door for rate cuts towards the end of next year. “
Indeed, some experts say it is too early to break out the champagne. Fed inflation metrics are still above the Fed’s 2% target and have declined less recently than earlier this year.
Concerning Fed Inflation Metrics | Source: Financial TimesAlso, premature cuts may accompany a slower economy. An economist at Strategas, Dan Rissmiller, cautions that a soft-landing thesis still faces many obstacles , namely below 4% unemployment and whether the US economy can grow unhindered amid higher interest rates.
Read more: How To Prepare for a Bitcoin ETF: A Step-by-Step Approach
Others say the re-entry of workers after the recent autoworkers and Hollywood strikes make the job numbers less robust than they appear at first glance, while others point to an inverted yield curve as the sign of an end–of–year recession in 2024.
How Bitcoin Could Ride Fed Policy
Recession fears still abound, but the Fed will unlikely start cutting rates tomorrow. Any hints as to the timing of future cuts may spur a Bitcoin rally, provided the asset doesn’t fall below $40,000, some experts predict.
Bitcoin could also rally independently of the Fed policy if the US Securities and Exchange Commission approves exchange-traded funds starting in January . If the Fed cuts rates in Q1, this would lower bond yields and make Bitcoin attractive to investors through ETFs.
The Bitcoin halving , expected in late April, could boost prices further by reducing the emission rate of Bitcoins , even as lower bond yields stimulate ETF demand. The Bitcoin halving also makes it a deflationary asset and a potentially safer store of value, considering how the Fed policy can devalue fiat currency at will .
Read more: Bitcoin Halving Cycles and Investment Strategies: What To Know
Do you have something to say about the Fed policy could be bullish for Bitcoin or anything else? Please write to us or join the discussion on our Telegram channel. You can also catch us on TikTok , Facebook , or X (Twitter) .
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Leaked Pokémon TCG Pocket Cards hint at upcoming Wonder Pick and Solo events
Share link:In this post: New Pokémon TCG Pocket cards have been leaked ahead of December’s Wonder Pick and Solo Battle events. The cards revealed during the leak include Bulbasaur and Magnemite. The leaked cards will play a central role in a Venusaur PvE event starting November 29th.
Animoca Brands invests in Igloo Inc to boost consumer NFT activity
Share link:In this post: Animoca Brands will participate in an undisclosed strategic round for Igloo, Inc. Pudgy Penguins remains a top 3 blue chip NFT collection. Pudgy Penguins spreads as a physical item brand, which will also have its own L2 network, Abstract.
OKG Research: The reverse on Trump trades, BTC as a hedge against inflation, and BTC ownership
Share link:In this post: OKG Research revealed in a recent report that the markets corrected yesterday, causing worry among investors. The report still outlined the use of BTC and other crypto as a hedge against macroeconomic factors that unsettle markets. OKG Research also revealed the growing adoption of BTC among globally listed companies.
The Daily: US appeals court rules OFAC exceeded its authority in Tornado Cash sanctions, WalletConnect launches its first airdrop season and more
The Fifth Circuit Court of Appeals ruled on Tuesday that the Treasury Department’s Office of Foreign Assets Control (OFAC) ”overstepped its authority” by sanctioning crypto mixer Tornado Cash, reversing a lower district court decision.WalletConnect has launched its first airdrop season and eligibility checker, allocating 50 million of the total supply of 1 billion WCT tokens to over 160,000 users, including builders and contributors.A Brazilian lawmaker has introduced a bill to create the Strategic Soverei