Bitcoin’s value surged above $67,000 briefly on Thursday, marking a significant rebound from previous levels. This uptick in price follows a period of increased interest in Bitcoin, particularly after the approval of bitcoin exchange-traded funds (ETFs) earlier in the year.
Influence of Federal Reserve’s Decision
The surge in Bitcoin’s value was primarily attributed to the US Federal Reserve’s decision to maintain steady interest rates at its March FOMC meeting. The Fed’s assessment of economic indicators, including solid job gains and low unemployment rates, contributed to market optimism.
Jerome Powell’s Remarks
Federal Reserve Chair Jerome Powell hinted at potential interest rate cuts later in the year, citing a decline in inflation. However, any decision on rate adjustments will be contingent upon ongoing economic data analysis, such as labor market trends, retail sales figures, inflation rates, and gross domestic product (GDP) numbers.
Factors Driving Bitcoin’s Momentum
Bitcoin has experienced a bullish trend in recent months, fueled by increased institutional interest from funds like Franklin Templeton and BlackRock, following the legalization of bitcoin ETFs. Major funds like Fidelity and Charles Schwab have also introduced Bitcoin ETFs, contributing to heightened investor optimism and risk appetite.
Anticipation Surrounding Bitcoin Halving
The impending fourth Bitcoin halving, expected around April, is anticipated to further impact Bitcoin’s scarcity. This event will reduce block rewards, making the cryptocurrency scarcer. Historically, Bitcoin prices tend to rise in anticipation of halving events, followed by continued upward momentum for about a year afterward. However, uncertainty looms regarding the extent of price increases, given global economic conditions and geopolitical uncertainties outside the US.
SOURCE: Ref Image from Quartz
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