At press time, bitcoin has surpassed the $10,800 mark, and some say that $11,000 is once again a very valid possibility for the currency.
How Much Further Will Bitcoin Go?
In the long run, it appears everything has been working in the currency’s favor. While President Trump may have tweeted some negative sentiment towards the currency and enthusiasts may have seen it fall to new lows ($9,400 and $9,500), the coin seems to have come back stronger than ever.
While Congress may have set its sights on attacking Libra and preventing the development of what is arguably one of the most important cryptocurrencies to emerge within the space over the past five years, bitcoin is still hitting back hard. It seems to be true what so many analysts are now saying… Bitcoin has developed a thicker skin. The currency has gained in maturity, and it’s not likely to let its followers down again they way it did in 2018.
Among the reasons for bitcoin’s sudden and unexpected rise could be the lowering of federal interest rates in the United States. As a means of protecting everyday Americans from the effects of the country’s ongoing trade war with China, the Federal Reserve has sought to lower interest rates down by approximately 0.5 percent. This will be the first time such a maneuver is made since the year 2008. That means that in over ten years, Americans have not seen drops in national interest.
Some have argued that the effects of Trump’s tariffs are falling onto average citizens, though this argument is lacking evidence. Nevertheless, stock markets are down, and many retailers have either increased prices on China-based products or are seeking goods made within America or its allies. Where Americans do seem to be getting affected is that some items are now less common, meaning they are left looking for alternatives to many of the items they required in everyday life.
More Cuts Will Lead to More Spikes
In the long run, it looks like this federal interest cut may be contributing to bitcoin’s meteoric rise. It’s unknown where these tariffs will take us. It’s unknown where America will be in one year or one week, and suddenly items like bitcoin are looking a little more intriguing to those who are concerned about inflation or hits to America’s national currency (USD).
With the rate cut, there is now less reason to hold American dollars in one’s bank account, so items like BTC appear more suitable. Rate cuts like these reduce yields on certain currencies, in this case USD, and many experts believe that further cuts are likely to occur in the future. Thus, if these moves continue in the coming months, we’re likely to see bitcoin incur further spikes.