Key takeaways
Bitcoin is buying and selling above the $28k stage for the primary time since June 2022.
Coinjournal’s Dan Ashmore believes that the interest rate forecasts are answerable for the continued rally by Bitcoin and different cryptocurrencies.
Many out there nonetheless think about the current banking disaster as the explanation why buyers are getting into the crypto market.
Interest rate forecasts behind Bitcoin’s rally
Bitcoin, the world’s largest cryptocurrency by market cap, has been performing excellently over the previous few weeks. At press time, the price of Bitcoin stands at $28,411, up by 13% over the past seven days.
Many within the crypto house attribute the continued crypto rally to the collapse of some banks, together with Signature Bank, Silvergate Bank, and Silicon Valley Bank.
However, throughout an interview with CNBC, Coinjournal’s Dan Ashmore identified that Bitcoin’s rally has to do with the interest rate forecasts somewhat than the current banking disaster.
Lot of chatter about what is driving this huge Bitcoin rally.
Spoke with @CNBC final evening about whether or not it is stemming from interest rate forecasts or if buyers are betting on Bitcoin instead to the banking turmoil???? pic.twitter.com/o45zOOPiiw
— Dan Ashmore (@DanniiAshmore) March 21, 2023
Regarding the continued rally, Ashmore stated;
“It is a reaction to the complete flip in interest rate forecasts in the wider economy. If you go back to before the Silicon Valley Bank collapse, there was an 83% probability that the interest rate would be increased by 100 basis points by the summer. Today, when we look at that, it is completely the opposite, and there is almost 100% of rate cuts.”
He added that the crypto market is reacting to the likelihood that the Fed’s current interest rate hikes are coming to an finish.
Interest rate lower is music to crypto buyers
With Bitcoin buying and selling at $28k per coin, buyers can be optimistic that costs might soar greater over the approaching days and weeks.
According to Ashmore, cryptocurrencies commerce as risk-on property, and an interest rate lower is music to the ears of crypto buyers.
Ashmore additionally mentioned the correlation between cryptocurrencies and tech shares. According to the Coinjournal analyst, whereas many count on crypto to be an unbiased hedge, the property nonetheless very a lot correlate with the inventory market, particularly tech shares. He concluded that
“The NASDAQ index rises, Bitcoin’s price also rises. The NASDAQ falls, and Bitcoin also falls a little more. The last couple of weeks have been interesting as Bitcoin has outperformed the NASDAQ. But it is a reflection of the fact that Bitcoin is trading in correlation with the interest rate forecasts.”
