All the dominoes fall into place one after the other. Bitcoin ETF, Halving, and now the Fed.
Monetary easing in sight
The American central bank left its rates unchanged for the third time in a row. Most Fed governors now expect to cut interest rates as early as next year.
The governors’ median projection indicates three rate cuts in 2024. This would equate to a cut of 0.75%, bringing the key rate to around 4.75%, compared to 5.50% currently.
However, the markets believe that the rate cut will go twice as fast. Futures pegged to interest rates suggest that the probability of seeing a first rate cut in three months is around 57%.
Which would give us five rate cuts in 2024. The market even assigns a non-trivial probability of 28% in favor of 6 rate cuts:
Jeffrey Rosenbergportfolio manager at BlackRock, believes that the FED’s decision not to raise interest rates on Wednesday is a ” green light “ for investors. The S&P 500 closed higher yesterday. The American stock market is only a hair away from a new all-time high.
The Fed Chairman said: “We are close to the peak of rates or we have reached it”. If rates have peaked, so has the US dollar. And while the US dollar has peaked, risk assets have bottomed out. And if risk assets have bottomed out, so has bitcoin.
That said, while bitcoin is primarily perceived as a risky asset due to its volatility, its monetary mass limited to 21 million units actually makes it the perfect store of value.
The imminent Halving seems to have made this clear to giant funds like BlackRock. Its CEO Larry Fink also believes that the recent rise in bitcoin is a “flight towards quality”.
ETF in January, monetary easing in March, Halving in April, new accounting standards? The dominoes are ready to fall to let bitcoin cross the $100,000 mark in 2024.
Adam Back even thinks that the capitalization of bitcoin will exceed that of gold within two years. A single bitcoin could then be worth more than $700,000.
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