2024-09-15 17:12:43
Investing.com – This already makes the hearts of many investors beat faster, conjuring up images of razor-thin profits and extreme market volatility. While long-term predictions for the world’s first cryptocurrency are promising, its short-term success is not guaranteed. The price of bitcoin in the coming weeks will be heavily influenced by the results of the US presidential election and especially by the interest rate decisions of the Federal Reserve.
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The next Federal Reserve interest rate decision is close, and after years of high interest rate policy, a cut could have a significant impact on financial markets. Reductions in interest rates are generally used to stimulate the economy by increasing the money supply and making borrowing easier.
Trade experts point out that such a move could significantly increase market liquidity. This means that there would be more money in circulation, which has historically led to increases in the value of risky assets like bitcoin.
Historical data shows that major bitcoin rallies have occurred as a result of major changes in global liquidity conditions. Therefore, it wouldn’t be a surprise if the liquidity of bitcoin further increased to new heights.
Trading Shot, a renowned market analyst at TradingView, points out that changes in the Global Liquidity Index (GLI) often track bitcoin price movements. He notes that historical patterns show that periods of increased liquidity often lead to large bitcoin rallies. Therefore, the Federal Reserve’s decision will play a crucial role in bitcoin’s next price movement. Depending on the speed and extent of the interest cuts, prices as high as $370,000 are possible.
However, it is not just monetary policy that casts its shadow on financial markets. The upcoming US presidential election will also have a significant impact on cryptocurrencies depending on whether Donald Trump or Kamala Harris wins.
Analysts believe that Trump’s victory could increase the price of bitcoin to $80,000. On the other hand, a win for Harris, who is known for her tougher regulatory stances, could push bitcoin lower, reaching $40,000 in the short term.
Despite some concerns that a Harris presidency could lead to more aggressive regulatory measures against cryptocurrencies, there is growing opinion among experts that such concerns are overblown. Bitcoin has long been a global phenomenon, and its performance is not entirely dependent on the US political landscape.
James Davies, co-founder of Crypto Valley Exchange, points out that bitcoin is becoming more institutionalized. In particular the emergence of Bitcoin ETFs shows that cryptocurrency is becoming more and more accepted in the mainstream and therefore more resistant to political fluctuations.
Finally, this step could lead to a clearer regulatory framework for more attention and discussion about cryptocurrencies in the political context. Daniel Cawrey of Tonkeeper believes that the elections will finally lead to stronger and clearer guidelines for the crypto industry, contributing to a more stable market environment in the long term.
Major macroeconomic and political forces continue to influence Bitcoin. The coming weeks and months will reveal how the decisions of the Federal Reserve and the outcome of the US elections will shape the world of cryptocurrencies. It will certainly not be a dull period for bitcoin investors.
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