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Bitcoin and Crypto to Gain as Falling Rates Expand Global Liquidity
As global interest rates decrease, 21shares VP says that Bitcoin and cryptocurrencies are profitable.
Kevin Helms
The strategic director of the cryptocurrency investment firm 21shares explained that the widespread selling of Bitcoin following the Federal Reserve's decision not to change interest rates was due to fears of escalating geopolitical tensions and conflicts in the Middle East, leading to a temporary flight to safety. He also pointed out that expected rate cuts in September, November, and December could boost global liquidity and potentially benefit risk assets like Bitcoin.
The impact of interest rates on Bitcoin and market dynamics
Eliézer Ndinga, Vice President and Chief Strategy and Business Development Officer at 21.co, the parent company of 21shares, shared his views on the impact of interest rates and market dynamics on Bitcoin. 21shares is one of the world's largest issuers of cryptocurrency exchange-traded products (ETPs). On Wednesday, the Federal Reserve decided to maintain the benchmark interest rate at 5.25%.
"Bitcoin dropped by about 3% the day after the Federal Reserve stabilized interest rates. The selling was widespread, and Nasdaq, S&P 500, and gold all decreased," he stated, adding the following.
The potential factors for the sell-off are the escalating geopolitical tensions in the Middle East and the fear of conflict escalation. Therefore, with geopolitical uncertainty in the background, we are seeing a temporary flight to safety.
Ndinga emphasized the resilience of the U.S. Bitcoin exchange-traded fund (ETF) market in the midst of the broader sell-off. "In the broader sell-off, inflows into the U.S. Bitcoin ETF market remain strong despite market sell-offs, with net inflows of about $70 million in the past week and over $18 billion in inflows since its launch in January," he continued.
Ndinga addressed the interest rate outlook and pointed out market expectations for future rate cuts. 'Regarding interest rates, according to the CME Fedwatch tool, the market has fully priced in a 90% probability of a rate cut in September and further rate cuts in November and December,' he concluded.
A decrease in interest rates could lead to an expansion of global liquidity, which is positive for risk assets such as bitcoin and cryptocurrencies.
Kevin Helms
The strategic director of the cryptocurrency investment firm 21shares explained that the widespread selling of Bitcoin following the Federal Reserve's decision not to change interest rates was due to fears of escalating geopolitical tensions and conflicts in the Middle East, leading to a temporary flight to safety. He also pointed out that expected rate cuts in September, November, and December could boost global liquidity and potentially benefit risk assets like Bitcoin.
The impact of interest rates on Bitcoin and market dynamics
Eliézer Ndinga, Vice President and Chief Strategy and Business Development Officer at 21.co, the parent company of 21shares, shared his views on the impact of interest rates and market dynamics on Bitcoin. 21shares is one of the world's largest issuers of cryptocurrency exchange-traded products (ETPs). On Wednesday, the Federal Reserve decided to maintain the benchmark interest rate at 5.25%.
"Bitcoin dropped by about 3% the day after the Federal Reserve stabilized interest rates. The selling was widespread, and Nasdaq, S&P 500, and gold all decreased," he stated, adding the following.
The potential factors for the sell-off are the escalating geopolitical tensions in the Middle East and the fear of conflict escalation. Therefore, with geopolitical uncertainty in the background, we are seeing a temporary flight to safety.
Ndinga emphasized the resilience of the U.S. Bitcoin exchange-traded fund (ETF) market in the midst of the broader sell-off. "In the broader sell-off, inflows into the U.S. Bitcoin ETF market remain strong despite market sell-offs, with net inflows of about $70 million in the past week and over $18 billion in inflows since its launch in January," he continued.
Ndinga addressed the interest rate outlook and pointed out market expectations for future rate cuts. 'Regarding interest rates, according to the CME Fedwatch tool, the market has fully priced in a 90% probability of a rate cut in September and further rate cuts in November and December,' he concluded.
A decrease in interest rates could lead to an expansion of global liquidity, which is positive for risk assets such as bitcoin and cryptocurrencies.
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