YEREVAN (CoinChapter.com) — Some Bitcoin bulls may want to limit their bets on interest rate cuts in 2024 as most anticipate the cryptocurrency’s price to boom toward $100,000. A macroeconomic indicator is the culprit. Let’s discuss below.
Raphael Bostic, the President of the Federal Reserve Bank of Atlanta, delivered a message that can potentially give Bitcoin bull whisperers pause. Notably, he previously forecasted two rate cuts in 2024 but has revised his prediction to just one.
“I have an outlook for how the economy’s going to perform,” Bostic said Monday at the University of Cincinnati’s Real Estate Center in Ohio, adding:
“If it does that, then I think we can afford to be patient.”
This cautious attitude can potentially hint at a sentiment of uncertainty within the Fed, even regarding inflation’s path going forward.
Concerns regarding inflation are at the heart of the Fed’s stance. Bostic highlighted “some troubling things” beneath the headline inflation figures, noting a broader range of consumer items experiencing elevated prices.
This observation is eye-worthy for BTC investors, as inflationary pressure tends to influence the Fed’s judgment, which in turn can decide investment flows into risk assets such as Bitcoin.
Despite holding interest rates steady, the Fed’s mixed view on rate cuts with a narrow split on the future can signal a more unpredictable monetary policy environment.
This, in turn, can lead to more market volatility, affecting risk assets like Bitcoin that are extremely sensitive to market movements. Furthermore, Bostic’s comments on the economy’s resilience and his call for patience with monetary policy further hint that the current economic landscape shows signs of a complex landscape that is not easy to predict.
With the economy showing signs of resilience, the urgency for rate cuts can diminish, potentially curbing one of the catalysts for a Bitcoin rally.
In light of this news, Bitcoin bulls that bet on rate as a catalyst for a new run just might need to recalibrate their hopes.
A more cautious Fed policy can indicate a less fertile ground for high-stakes win-or-lose BTC runs. As the situation unfolds, Bitcoin investors need to stay well informed about Fed policies. While “straight to the moon” optimism is prominent in crypto, this time around, maybe it’s wiser to measure seven times before doing anything.
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