Bitcoin Soars to Record High Amid Expectations of Rate Cuts and Pro-Crypto Stance
The cryptocurrency market is abuzz with excitement as Bitcoin surged past $93,000, fueled by expectations of further interest-rate reductions by the Federal Reserve and President-elect Donald Trump’s supportive stance on digital assets.
Market Sentiment Shifts
The digital asset’s value rose nearly 6% in the US, reaching a record high of $93,462, before retreating to $89,974. The wider crypto market experienced a volatile trading session, oscillating between gains and losses. Investors are now trying to decipher whether Trump’s rhetorical support will continue to drive Bitcoin’s growth, potentially pushing it towards $100,000, or if it will give way to profit-taking after a 33% increase since the US election.
Experts Weigh In
Chris Weston, head of research at Pepperstone Group, notes that “after such an extended move, it’s reasonable to think we will see opinions shift, resulting in increased two-way flows.” However, he believes that the trend in Bitcoin remains upward, and buyers will likely re-enter the market once the liquidation of concentrated positions has run its course.
Inflation Data and Rate Cut Expectations
The release of US inflation data on Wednesday, which met analyst projections, led traders to increase their bets on another quarter-point rate cut by the Fed in December. This development has added to the optimism surrounding Bitcoin’s growth prospects.
Trump’s Crypto Agenda
President-elect Trump has pledged to create a friendly regulatory framework for crypto, establish a strategic Bitcoin stockpile, and make the US the global hub for the industry. While these promises have boosted investor confidence, questions remain about their feasibility and implementation timeline. With Trump’s Republican Party holding unified control of the elected branches of government, matters of state such as economic and fiscal policy may take priority over crypto-related initiatives.
Industry Insights
Billionaire Michael Novogratz, founder of crypto-focused Galaxy Digital LP, expressed skepticism about the likelihood of a US Bitcoin strategic reserve, but noted that if it materializes, the largest token could soar to $500,000.
Ripple Effect Across Financial Sector
The crypto rally is having a profound impact on the financial sector, driving peak trading volumes and inflows at US Bitcoin exchange-traded funds. MicroStrategy Inc., a software company that has invested heavily in Bitcoin, is powering a Bloomberg gauge for convertible US debt towards its best month this year.
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