Over the past few days, the crypto world has seen major movements, influenced not only by economic fluctuations but also by political events of great impact. Bitcoin and Ethereum have seen significant increases, partly due to expectations regarding the Federal Reserve’s monetary policies and events that have shaken American politics. We analyse what is happening and what the possible future consequences are.
One of the most relevant news items in recent days concerns expectations of an interest rate cut by the Federal Reserve. Analysts now predict a 50 basis point cut, information that is fuelling growing optimism in the cryptocurrency market. According to some experts, such as analysts at Bitwise, such a sharp cut could have a positive impact on the prices of Bitcoin and other cryptocurrencies. The reason is simple: when interest rates fall, investors tend to look for alternatives to traditional low-risk investments, such as government bonds, and cryptocurrencies often become a preferred choice to diversify portfolios.
The expectation of a more accommodative monetary policy from the Fed has led to increased betting on Bitcoin, which has seen a significant rise in its value in the days since the speculation. Analysts at Bitwise explained that the relationship between lower interest rates and the rise of cryptocurrencies is well-established, with many investors seeing Bitcoin as a sort of ‘refuge’ in times of economic uncertainty.
Another element that helped shake up the market was an alleged assassination attempt against former US President Donald Trump. Although the full details of the incident are not yet known, the event triggered a negative reaction in the markets. The risk of losing the most iconic American figure in the crypto world may become the most powerful ‘pick’ in the entire potentially bullish period between 2024 and 2025.
