Bitcoin

History suggests the crypto market is about to skyrocket due to this little-known fact

Published

10 months ago

14 June, 2024

History suggests the crypto market is about to skyrocket due to this little-known fact

Things in the crypto world are looking up. After a brutal crypto winter, many cryptocurrencies are at or near historic highs and the future finally looks bright once again.

However, the situation is likely to get much brighter for one fundamental reason: central banks around the world are starting to cut interest rates.

The two may seem unrelated, but the ties between central bank actions and crypto market behaviors run deep. For investors, this represents an attractive opportunity. A new wave of liquidity could soon be injected into the market, potentially setting the stage for a major crypto boom.

Investor taking off his glasses while looking at his phone in surprise

Image source: Getty Images.

Central banks start cutting interest rates

In recent days, the European Central Bank (ECB) and the central banks of Canada, Switzerland and Sweden have reduced their reference interest rates. Those changes followed some of the most aggressive rate hikes in decades, which banks instituted in their efforts to curb rising inflation.

While the US Federal Reserve has not yet started cutting rates, there is growing optimism among market watchers that it will do so by the end of this year. Given that the US is still the largest economy in the world, this potential policy shift is seen by many as the last domino that needs to fall to usher in a more favorable environment for risky assets like cryptocurrencies.

Why Interest Rates Matter for Crypto

At first glance, it may seem that interest rates and cryptocurrencies exist in completely separate spheres. Cryptocurrencies operate on decentralized networks with their own monetary policies. However, they are inextricably linked to the broader economy.

Crypto is a so-called risk-on asset class, which means it tends to perform well when investors are more willing to accept more risk in pursuit of profit. This typically happens during periods of high liquidity, when money is cheap and abundant. For this scenario to repeat itself, interest rates will have to be reduced.

To understand why central bank interest rate cuts will benefit crypto, it may be helpful to understand the impact of rising interest rates. When central banks raise interest rates, loans become more expensive, which tends to reduce the amount of money circulating in the economy. High interest rates also make low-risk interest-bearing assets more attractive, further reducing the amount of money invested in riskier assets.

On the other hand, when interest rates fall, borrowing costs decrease and liquidity increases. Lower interest rates also reduce the appeal of savings accounts and bonds. With excess capital circulating, this liquidity typically finds its way into multiple asset classes, including stocks, real estate, and, yes, cryptocurrencies.

The story continues

Historical evidence

We don’t have to look far back to see evidence of how powerful the impact of lower interest rates on the crypto market can be. In 2020, central banks around the world cut interest rates to near zero in response to the economic fallout from the COVID-19 pandemic. This resulted in an unprecedented injection of liquidity into the global financial system.

The result? The crypto market has grown from around $190 billion to over $2 trillion. Bitcoin (CRYPTO:BTC), the leading cryptocurrency, saw its price rise from around $7,000 in early 2020 to nearly $69,000 in November 2021.

One of the most impressive examples of the 2021 bull market was Solana (CRYPTO: SOL). Taking advantage of waves of increased liquidity (and a lot of speculation), in less than two years, it jumped more than 25,000%.

Maintaining discipline amid the boom

While this round of rate cuts is not as dramatic as the 2020 cuts, they should still bring a significant benefit to crypto. And as is common in cryptocurrency bull markets, this means that some obscure cryptocurrencies will begin to post astronomical gains.

However, while this is easier said than done, it is imperative that investors maintain a balanced perspective and not get carried away by the hype of speculation – most of these cryptocurrencies simply are not good long-term investments.

To successfully navigate this next phase, investors will need to remain disciplined and focus on top-tier cryptocurrencies with proven track records and strong utility. Bitcoin and Ethereum (CRYPTO: ETH), for example, meet this criteria.

Although this strategy may not be as glamorous as investing in trendy products meme coinsIt is one of the few proven strategies that provides investors with the kind of gains that only crypto can produce.

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History suggests the crypto market is about to skyrocket due to this little-known fact was originally published by The Motley Fool

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We are the editorial team of SatoshiTimes, where seriousness meets clarity in cryptocurrency analysis. With a robust team of finance and blockchain technology experts, we are dedicated to meticulously exploring complex crypto markets with detailed assessments and an unbiased approach. Our mission is to democratize access to knowledge of emerging financial technologies, ensuring they are understandable and accessible to all. In every article on SatoshiTimes, we strive to provide content that not only educates, but also empowers our readers, facilitating their integration into the financial digital age.

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Bitcoin

What to watch for in the markets

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Photo: Andrew Harnik (Getty Images)

After witnessing one of the largest global IT outages on record, affecting the travel, finance and healthcare sectors worldwideThis week is set to see more political drama, events, and earnings reports from tech giants.

Donald Trump’s ‘Lovefest’ Sets Jamie Dimon Up for Consideration for Treasury Secretary Job

Let’s take a look at what awaits us:

Major companies will release their earnings reports

Major tech companies and others will release their earnings reports this week, paving the way for what the second half of 2024 will look like.

Monday

Verizon will report earnings before the start of operations.

Tuesday

Coca-Cola, Comcast and UPS are all set to report earnings before the market opens.
Tesla will report earnings in the morning, while General Motors will report earnings in the evening.
Alphabet and Visa will report results after the market closes.

Wednesday

AT&T will release its report before the market opens.
Ford and Chipotle will report earnings after the market closes.

Thursday

Earnings reports from AstraZeneca, American Airlines and Southwest Airlines will be released before the market opens.

Trump to speak at Bitcoin conference

Presumptive Republican presidential nominee Donald Trump will speak at the next Bitcoin Conference in Nashville, Tennesseewhich is scheduled for July 25-27. While this is the first time a presidential candidate will attend the conference, it has sparked a debate over whether the crypto-friendly Trump will receive support from the crypto community in the upcoming election.

In addition to Trump, independent presidential candidate Robert F. Kennedy Jr. will also discuss crypto during the conference. Crypto advocates such as ARK Investment’s Cathie Wood, MicroStrategy’s Michael Saylor, and whistleblower Edward Snowden are among some prominent names who will be participating in the conference.

Ether ETFs are on the way

New Ether Spot ETFs are set to begin trading on Tuesday, July 23. Much like the spot Bitcoin ETFs, these ETFs will allow investors to buy the second most popular cryptocurrency like stocks. BlackRock, Ark Invest/21Shares, VanEck, Grayscale, Fidelity, Bitwise, Franklin Templeton, and Invesco/Galaxy Digital are all set to offer Ether ETFs. Crypto asset manager Bitwise predict that trading in the Ether ETF will drive the price of Ether higher, potentially surpassing $5,000.

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Bitcoin

Cryptocurrency’s Biggest Winners and Losers in a Second Trump Presidency

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Cryptocurrency’s Biggest Winners and Losers in a Second Trump Presidency

Bitcoin miners and cryptocurrency companies that have been blocked from going public in the U.S. could ultimately be the biggest winners in the digital asset world under a second Donald Trump presidency. Foreign companies at risk of losing market share could end up being the biggest losers.

That’s the view that’s taking hold among market participants and observers in the wake of the former president’s growing embrace of cryptocurrency as his chances of election grow. survey released Thursday by CBS News showed Trump with the majority — 52 percent — of likely voters in his likely November rematch with President Joe Biden.

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Bitcoin

Bitcoin, Ethereum, Solana and Cryptocurrency Markets Look Ready to ‘Send’ as Stars Align, According to Investor Chris Burniske

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Bitcoin, Ethereum, Solana and Cryptocurrency Markets Look Ready to ‘Send’ as Stars Align, According to Investor Chris Burniske

Cryptocurrency investor Chris Burniske says Bitcoin (BTC), Ethereum (ETH), Solana (SUN) and the cryptocurrency market in general seem poised for a run.

Former Head of Cryptocurrency at ARK Invest account his 292,200 followers on social media platform X that several catalysts are aligning, suggesting that digital asset markets are on the verge of a bull run.

According to Burniske, a partner at venture capital firm Placeholder, the highly anticipated launch of Ethereum-based exchange-traded funds (ETFs), Republican presidential candidate Donald Trump speaking at an upcoming Bitcoin event, and the current state of the BTC, ETH, and SOL charts all suggest significant optimism for the cryptocurrency markets.

“With ETH ETFs set to go live, Trump speaking at The Bitcoin Conference, and BTC, ETH, and SOL charts looking [they do] (while stocks are weak), it’s hard to imagine a world where we don’t ship next week.”

Reuters recently reported that preliminary approval for ETH ETFs has been granted as the Bitcoin Conference is scheduled to take place from July 25-27.

BTC, ETH, and SOL are trading at $67,333, $3,528, and $174 at the time of writing, respectively.

The venture capitalist too provides an update on his prediction that the total crypto market cap will eventually hit $10 trillion. According to his chart, the path to $10 trillion is currently “23%” complete, as it sits around $2.2 trillion.

Source: Chris BurniskeX

Earlier this month, Burniske he said in an interview with Real Vision CEO Raoul Paul that he has his eye on the Move ecosystem, which was originally built by social media giant Meta and then used to develop layer 1 blockchains Sui (IUE) and Apts (APT).

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Bitcoin

Here’s the next target for BTC before bulls can hold out for $70K

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Here’s the next target for BTC before bulls can hold out for $70K

Bitcoin’s recovery is going well, and the market is seemingly poised to create a new all-time high in the near term.

Technical analysis

Per NegotiationRage

The daily chart

As the daily chart shows, the price of Bitcoin has been rising since it broke above the 200-day moving average.

The market has also reclaimed the $60K and $65K levels and is moving towards the $68K resistance zone, which could be the last hurdle before creating a new all-time high. With the RSI also indicating that the price has clear bullish momentum, it could be just a matter of time.

Source: TradingView

The 4-hour chart

Looking at the 4-hour chart, it is evident that the price has been rising rapidly since breaking the downtrend line to the upside. The market also broke the $65K resistance level with momentum, turning it into a support.

While almost everything points to a new record high in the coming weeks, there is one worrying sign. The RSI is showing a clear bearish divergence between recent price highs, which could indicate a correction or even a reversal in the near term.

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