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Analysts Warned: Bitcoin Price Could Take Unexpected Big Surprise If Interest Rate Cut Happens

Analysts Warned: Bitcoin Price Could Take Unexpected Big Surprise If Interest Rate Cut Happens

BitcoinsistemiBitcoinsistemi2024/09/17 06:24
By:Mete Demiralp

According to analysts, a higher-than-expected interest rate cut could paradoxically lead to a drop in Bitcoin price.

As the Fed prepares to announce its decision on interest rates this Wednesday, some analysts are warning that an aggressive cut could paradoxically hurt Bitcoin (BTC) and other risky assets.

While low interest rates typically boost demand for cryptocurrencies, a more dramatic cut could signal deeper economic concerns, causing investors to pull back from riskier investments.

Shannon Saccocia, chief investment officer at Neuberger Berman Private Wealth, told MarketWatch that a larger-than-expected rate cut could indicate that the economy is in worse shape than expected, which could lead to a sell-off in assets like Bitcoin.

This view was echoed by Dave Birnbaum, vice president of product and marketing at Coinbits, who wrote for Forbes, noting that if the Fed signals deeper economic concerns, “market participants could pull back from assets they perceive as risky, including Bitcoin.”

Related News Binance Responds to Criticism of Its Recent Altcoin Listings

Crypto investors are hoping for another rally similar to previous cycles. In October 2019, the Fed implemented three 25 basis point cuts, referred to by Fed Chair Jerome Powell as “mid-cycle adjustments.” This period, and the massive fiscal response to the Covid-19 pandemic, saw Bitcoin’s price increase by more than 1,300%, surpassing $60,000 in 2020.

*This is not investment advice.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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