Crypto mania: Bitcoin set to skyrocket as interest rates plummet
Merkle Capital is forecasting a surge in Bitcoin prices and a flurry of cryptocurrency investments this month, thanks to the global trend of dropping interest rates.
Investment wizard Woramet Chansen from Merkle Capital spilled the beans, noting that Bitcoin’s price rocketed over 25% in September. This came hot on the heels of the US Federal Reserve’s first rate cut in four years, slicing 0.50 percentage points off the interest rates, said Woramet.
“That was a pivotal moment in the market cycle. It encouraged investors to take more risks and opened the door for long-term digital asset investments.”
While Bitcoin has dazzled by reaching new record highs, other cryptocurrencies haven’t quite hit the same peaks. Yet, Woramet is bullish on the potential for Bitcoin and pals, particularly Ethereum, to make significant gains this month, spurred on by the Fed’s September dot plot.
This dot plot hints at total interest rate cuts of 2.5 percentage points by 2026’s end, including last month’s dip, targeting a fed funds rate range of 2.75-3.00% come 2026, Woramet added.
“This forebodes a great opportunity for risk assets when examining fundamentals and statistics.”
Meanwhile, the stablecoin scene is booming, hitting its highest supply level in two years, marking a surge in market confidence, said Woramet.
“The record-breaking stablecoin supply illustrates rising investor faith.”
Merkle Capital also reported a spectacular 25% market cap increase for altcoins, excluding Bitcoin and Ethereum, over the past six months. This bullish performance reflects investor confidence, especially in the Ethereum realm.
However, commercial chief Mana Khanijou highlighted geopolitical tensions as a lurking risk.
“If conflict arises, it may trigger panic selling, derailing the current economic recovery.”
Still, the outlook for short- to medium-term crypto investments remains optimistic.
InnovestX Securities’ top researcher, Sukit Udomsirikul, chimed in, pointing out that post-halving, Bitcoin hovers between US$50,000-55,000, considered fair game based on demand and supply dynamics, buoyed by a weak US dollar and plummeting interest rates.
The upcoming US presidential election in early November could shake things up, Sukit advised.
“If Donald Trump wins, we might need to keep tabs on any crypto-friendly policies.”
Bitcoin and Ethereum, increasingly viewed as alternative assets, are being snapped up through spot exchange-traded funds, Sukit concluded.
What Other Media Are Saying
- FXStreet reports that despite Fed Chair Powell’s hints at further rate cuts, the crypto market continued its downtrend with a 4.2% decline in Bitcoin and other major cryptos. (Read more)
- Forbes suggests that lower interest rates will positively impact Bitcoin by increasing liquidity and investor appetite for risk-on assets, despite long-term contrasts with fiat currency models. (Read more)
- Yahoo Finance discusses Bitcoin’s fate hanging on Fed rate cuts, market exhaustion, and experts’ predictions of potential dramatic increases despite interest rate uncertainty. (Read more)
Frequently Asked Questions
Here are some common questions asked about this news
Why does Merkle Capital expect Bitcoin prices to rise?
Due to falling interest rates and increased risk-taking by investors.
How much did Bitcoin prices increase in September?
Bitcoin prices rose by more than 25% in September.
What is the significance of the Fed’s dot plot for cryptocurrencies?
It suggests future interest rate cuts, which is positive for risk assets like cryptocurrencies.
What is the current outlook for stablecoins?
Stablecoin supply is at its highest level in two years, indicating increasing investor confidence.
What could be a risk factor for the crypto market according to Merkle Capital?
Escalation of geopolitical conflicts may cause panic selling and reverse economic recovery.
