• Bitcoin is trading above the $28k level for the first time since June 2022.
• Coinjournal’s Dan Ashmore believes that the interest rate forecasts are responsible for the ongoing rally by Bitcoin and other cryptocurrencies.
• Many in the market still consider the recent banking crisis as the reason why investors are entering the crypto market.
Bitcoin Rallying Due to Interest Rate Forecasts
Bitcoin, the world’s largest cryptocurrency by market cap, has been performing excellently over the past few weeks. At press time, its price stands at $28,411, up 13% over last seven days. Coinjournal’s Dan Ashmore recently pointed out that Bitcoin’s rally has to do with interest rate forecasts rather than recent banking crisis.
Interest Rate Forecasts Behind Bitcoin Rally
During an interview with CNBC, Ashmore said that this incredible rally is a reaction to complete flip in interest rate forecasts in wider economy. Before Silicon Valley Bank collapse there was 83% probability of 100 basis points increase in summer, but today it’s completely opposite with almost 100% chance of rate cuts. According to him cryptocurrencies trade as risk-on assets so such a move from Fed could be music to crypto investors ears who believe prices will soar higher over coming days and weeks.
Banking Crisis Linked To Crypto Rally?
Many people attribute crypto rally to collapse of few banks like Signature Bank, Silvergate Bank and Silicon Valley Bank but Ashmore believes it’s largely due to change in Fed’s interest rates policy. He added that crypto market reacts quickly when major events like these happen hence it can be argued that banking crisis also played its part in pushing prices higher even though it was not main driving force behind current bull run we’re seeing right now.
What Does Future Hold For Crypto Market?
It’s impossible to predict what will happen next but one thing is certain – future looks bright for cryptocurrencies given massive institutional investments which have been pouring into space lately and positive news about digital asset regulations from around world which would bring more clarity on legal status of cryptos like Bitcoin & Ethereum going forward.
The ongoing crypto rally has prompted many experts to come up with various theories about why we’re seeing such an incredible surge in prices but according to Coinjournal’s Dan Ashmore most likely reason behind this extraordinary growth is because of change in interest rate forecasts by Federal Reserve which have pushed investors towards investing more heavily into cryptocurrencies as risk-on assets rather than traditional markets such as stocks or bonds etc