Bitcoin might finally get the needed price boost if the Federal Reserve implements a rate cut, as many in the financial world are anticipating today
The U.S. Federal Reserve will likely cut interest rates, which could significantly impact the financial market. The move will mark a significant development, as the Federal Reserve last cut interest rates in 2020. Should the cut happen today as predicted, the impact on Bitcoin may fuel investors’ interest in the digital asset.
Interest Rate Cut, Proven Path to Exponential Growth?
Lark Davis, a Bitcoin investor and entrepreneur, anticipates a sharp rise in the price of BTC if the U.S. Reserve goes ahead with the cut. In a post on X, Davis noted that the digital asset might witness exponential growth based on historical patterns.
“If history repeats itself, the next 6-12 months are going to be insane,” he stated.
The Fed is expected to cut interest rates tomorrow.
The last time the Fed cut rates, Bitcoin went parabolic 📈
If history repeats itself, the next 6-12 months are going to be insane.
h/t/ @milkroaddaily pic.twitter.com/GxNtThDDwS
— Lark Davis (@TheCryptoLark) September 17, 2024
Notably, Davis anticipates parabolic price growth and a rapid upward trend in BTC value driven by market sentiments. Although he did not put a figure to his projections, Davis expects Bitcoin to cross the $100,000 level.
When the U.S. Reserve cut interest rates in 2020, BTC’s price almost doubled within six months from $6,200 to $11,800. Remarkably, one year after the interest rate cut, in March 2021, the value of Bitcoin rose significantly to a staggering $48,400.
Bitcoin in Price Rebound Mode?
Generally, interest rate cuts make borrowing cheaper and can provide more liquidity in the financial ecosystem. While it is still being debated whether the cut will be a 50 or 25 basis point cut, the anticipation remains high.
This could encourage investors to bet on assets like Bitcoin for better returns. This pull to Bitcoin might drive demand and likely lead to wild price increases.
The signal for an interest rate cut came in August when Jerome Powell, the Chairman of the Federal Reserve, delivered his keynote address at a gathering of central bankers in Wyoming. At the time, Powell expressed confidence that U.S. inflation was under control.
At the time of writing, data shows Bitcoin traded up by 4.59% to exchange hands at $60,322.42 in an obvious price rebound.
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