Jerome Powell, the Federal Reserve Chair, recently hinted at a potential interest rate cut in September, which could shake up the cryptocurrency market.
Bitcoin, currently priced at $63,051.88, has dropped about 6.6% over the past month.
Powell’s comments, made at a Jackson Hole symposium, suggest the Fed is shifting focus from inflation concerns to job market risks. The current Fed Funds Rate is at 5.5%, up from 0.25% in early 2020, reflecting a steady increase over the past few years.
The U.S. unemployment rate has risen to 4.3% from a low of 3.4% earlier this year, signaling growing economic concerns.
Lower interest rates typically encourage borrowing and investment, which could lead to increased capital flowing into cryptocurrencies as bonds become less attractive.
Historical trends show that rate cuts often boost Bitcoin’s price, as seen in March 2020 when Bitcoin’s value rose despite global economic turmoil.
Given these factors, Bitcoin and the broader crypto market might experience significant movements in the coming months, potentially marking the start of a new bullish trend.
On September 18, the US Federal Reserve made a notable move by cutting interest rates by 50 basis points, marking the start of a new easing cycle.
Commerzbank, one of Germany’s largest financial institutions, is making a significant move into cryptocurrency by offering Bitcoin and Ethereum trading services to its corporate clients.
For the first time in 4 years, Fed cut the rates for the first time in 4 years, which lead to a notable surge in cryptocurrency prices.
Donald Trump, the Republican presidential nominee, made headlines by becoming the first former U.S. president to make a Bitcoin transaction.