BitMEX co-founder Arthur Hayes said that the recent decision by the United States Federal Reserve (Fed) to lower interest rates is expected to trigger a rapid surge in Bitcoin’s price, potentially propelling it toward the $70,000 mark.
Hayes had previously predicted that Bitcoin would reach this level after March, but the Fed had increased interest rates three times between March and the current period.
- Bitcoin’s failure to reach the previously predicted $70,000 level is due to a focus on the nominal Federal Reserve (Fed) interest rate rather than the real interest rate when compared to the United States’ high nominal GDP growth.
- Hayes noted that Bitcoin’s price performance is influenced by the market’s perception of real interest rates, which take into account inflation and other economic factors.
- In his latest blog post, ‘Are we there yet,’ Hayes explained that the general notion suggests that when interest rates rise, the prices of risky financial assets like Bitcoin should fall.
- Reiterating his comments at Korea Blockchain Week, Hayes pointed out that investors’ search for positive real yields kickstarted a Bitcoin bull market on March 10th, following which the flagship asset is up by close to 29%.
- Even as the price tested $30,000 and failed multiple times, Bitcoin is still trading well above its pre-BTFP bailout level of $20,000, Hayes added.
- The BitMEX founder further said that unconventional monetary policies, rising government debt, and the changing economic landscape continue to contribute to Bitcoin’s appeal.
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