By James Davis
Bitcoin Crosses $43K
Since yesterday, Bitcoin and other top cryptocurrencies have been on an uptrend as investors await major news from a US regulator. BTC, the biggest digital currency by market cap, has crossed above $43,000 to trade at $43,276 as of this writing. According to data from CoinGecko, the coin is up 3.2% over the past 24 hours and 8.4% in the last seven days.
Bitcoin had fallen to $38,967 just last week, following intense selling pressure from asset manager Grayscale. The company’s ETF Bitcoin Trust saw massive outflows as investors redeemed their shares for BTC and cashed out the digital coin.
BTC had been struggling to post substantial gains since the launch of the spot Bitcoin ETF on American soil until last Thursday, when selling pressure started to cool down.
This week is key in determining whether the recovery rally will continue or Bitcoin and other cryptocurrencies will trend down again. The US central bank is expected to announce its decision regarding interest rates on Wednesday.
The Fed’s Rate Hikes
The Federal Reserve started hiking rates in 2022 in an attempt to control 4-decade high inflation. The move caused the value of crypto and stocks to decline significantly as investors shifted their focus to less volatile assets like bonds.
In 2023, the central bank slowed its pace of increasing rates, a decision that caused a revived interest in crypto assets. The US regulator has maintained the interest rate at 25 basis points for several months. Many crypto investors expect that the Fed will cut the rates in 2024. However, they are pessimistic that the regulator will do so tomorrow.
Crypto Analyst Predicts Interest Rates to Remain Unchanged After Tomorrow
James Butterfill, Head of Research at digital asset management company CoinShares, anticipates that interest rates will remain the same, and that explains the current price action in the crypto market.
However, Butterfill says if Fed Chair Jerome Powell hints at a rate cut in the next Federal Open Market Committee set for March, then Bitcoin’s price will continue to surge. Meanwhile, most stocks have been rallying since the start of the month as Bitcoin struggled.