As an analyst with extensive experience in the crypto market, I find Arthur Hayes’ perspective on the impact of interest rate cuts on Bitcoin’s price intriguing. His insights, rooted in his deep understanding of financial markets and the cryptocurrency landscape, offer a refreshing viewpoint that challenges the common assumption about the relationship between interest rates and risk-on assets like Bitcoin.
Arthur Hayes, the co-founder and ex-CEO of the BitMEX cryptocurrency exchange, recently expressed his views on a platform about why he believes the widely awaited reduction in interest rates by the U.S. Federal Reserve may not produce the predicted effect on Bitcoin‘s value.
Interest Rate Cuts Not The Silver Bullet For Higher BTC Price
According to Hayes on X, although Federal Reserve Chair Jerome Jerome Powell’s Jerome Powellar Powellar Jerome Powell hinted at an upcoming decrease in interest rates from September 2024 forward, Bitcoin’s price may not act as some in the crypto market anticipate.
Following Powell’s Jackson Hoe’s method on August 23, they proposed the concept of Bitcoin price using an approach that had been on a steady downward trajectory, tumbling from approximately $64,000 to $58,881 by Sep 3, 2024.
As per the original BitMEX model, the subsequent and the new BitMEX, the incoming investment rate of the Interest Rate-and the incoming returns-the investment proposal (RRP) has a more appealing feel than the traditional Treasury Bill treasury
To put it simply, Repurchase Agreements (RRPs) are like short-term loans in financial markets. In an RRP, one party, often a central bank or financial institution, sells securities to another party with an agreement to buy them back at a later date for a higher price. The difference between the initial purchase price and the future repurchase price is the interest that the buyer of the securities earns.
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Significantly, RRPs (Respository operations) were given around $120 billion extra, following the expected interest rate reduction announcement from September 2024. It is anticipated that this increase will persist if treasury bill rates remain below RRP rates, according to Hayes’ forecasts.
Could Bitcoin Halving Play A Key Role In Resuming Bull Market?
As a researcher, I challenge the commonly held belief that lowering interest rates sparks growth in riskier assets like stocks and cryptocurrencies. Interestingly, this year has been unique as we’ve witnessed the first Bitcoin halving since 2020. This could suggest that other factors other than what’ that may influence the price and possibly even assets in risk risk-friendlyly- a shiftlight potential that that contention in the the- Intriguion- The- Paraget-paraget-paraget-paraget-paraget-paraget-paraget-paraget-paraget-paraget-paraget-paraget-paraget-paraget-paraget-paraget-paraget-paraget-paraget-paraget-paraget-passinget-paraget-gaget-get-paraget-paraphrer, my explanation runs counter to the widely held assumption that lower interest-sharedinterest-counterargumentthat-sharedinterest-counterargumentthat-sharedinterest-counterargumentthat-sharedinterest-counterargumentthat-sharedargumentthat-sharedargumentthat-counterargumentthat-counterargumentat-counterargumentat-counterargumentat-counterargumentat-counterargumentat-counterargumentat-counterargumentat-counit’suggest that interest rate cuts the widely acceptedinterest rates oftion, I question is challenging the assumption that Hayesigns as researchers. In this year, we observed a unique occurrence: the first Bitcoin halving since 2020, which could potentially challenge the commonly held belief that lowering interest rates doesn’t automatically boost the price of risk-on assets such as stocks and digital assets.
Historically, Bitcoin has seen increases in value during its halving periods, such as in 2020 when it happened amidst the COVID pandemic, causing a dip in the prices of other risky investments at the beginning of the year. Many experienced analysts predict that Bitcoin will follow this trend again, potentially sparking a fresh wave of bullish sentiment and pushing the top digital currency to record-breaking highs.
2024 could bring a thrilling second half for the crypto sector, as significant reductions in interest rates, Bitcoin’s halving event, and escalating institutional involvement in Bitcoin ETFs may lead to heightened activity.
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2024-09-04 12:42