Analysts Predict Fourfold Increase in BTC Exchange Rate
Date: 2023-10-12 Author: Dima Zakharov Categories: CRYPTO PAYMENTS, IN WORLD
Scenario from 2019 Fosters Optimism Among Cryptocurrency Market Analysts
The events unfolding in the cryptocurrency market have sparked optimism among market researchers, all thanks to a scenario reminiscent of 2019. In 2018, the Federal Reserve System (FRS) was actively increasing base rates, only to halt those efforts shortly after. Following this, the price of the digital currency BTC skyrocketed by fourfold to reach $13,880. While history doesn't always repeat itself, in financial markets, such occurrences are relatively common. Nevertheless, it's essential to understand that the world has undergone significant changes since then.
Federal Reserve Officials Signal a Potential Halt in Rate Hikes
On Tuesday, the President of the Federal Reserve Bank of Atlanta, Raphael Bostic, and the President of the Federal Reserve Bank of Minneapolis, Neel Kashkari, stated that the central bank might not need to further increase rates. Lori Logan, President of the Federal Reserve Bank of Dallas, and Christopher Waller, head of the Federal Reserve System (FRS), commented that the rise in Treasury bond yields had achieved its purpose. This has averted the acute need for further tightening of monetary policy.
In the previous rate cycle, which spanned three years, rates reached a peak of 2.5% in December 2018. Subsequently, the Central Bank decided to take a 7-month break. The BTC exchange rate hit a local low in December 2018 but surged to $13,880 by the end of June 2019.
Significance of the 2019 Scenario for Cryptocurrency Markets
Marcus Tilen, the Head of Research and Strategy at Matrixport, affirmed that "currently, the most critical macroeconomic factor appears to be a reflection of the 2019 situation. Back then, the FRS paused its rate hikes, leading to a substantial 350% increase in Bitcoin prices."
Tilen believes that traders should closely monitor the rationale behind a potential reduction in FRS rates. He noted, "If this occurs as a response to economic weakness and low inflation, it could have bearish consequences."
