Bitcoin at $100,000: An analyst's shock bet if the Fed lowers rates!

As the crypto market eagerly awaits the Fed's next interest rate decisions, analyst says Bitcoin could reach new highs if US high-yield interest rates fall below 7 %. However, the path to $100,000 could be rocky.

The high rate of return, the compass of the Bitcoin price

Jerome Powell, Chairman of the Fed, is set to deliver a highly anticipated speech that could seal the fate of Bitcoin in the short term.

According to Timothy Peterson, founder and manager of Cane Island Alternative Advisors, the evolution of interest rates is the main indicator to watch to anticipate the future trajectory of BTC.

The high rate of return in the United States is an excellent barometer. It really needs to drop below 6-7% for Bitcoin to sustainably beat its historic record” , does he have entrusts at Cointelegraph.

Currently, the U.S. high yield, which represents the rate on high-yield corporate bonds, sits at 7.54% according to YCharts. Mr. Peterson estimates that if this rate drops to a range of 6-7%, Bitcoin could reach the long-awaited price of $100,000 by the end of 2024 or at the latest in the second quarter of 2025.

Chart of the US high yield, currently at 7.54%.  Source: YChartsChart of the US high yield, currently at 7.54%.  Source: YCharts
Chart of the US high yield, currently at 7.54%. Source: YCharts

The monetary policy of the Fed, arbiter of the crypto market

Typically, when the Federal Reserve lowers policy rates, it causes high-yield interest rates to rise. This is what nearly two-thirds of economists surveyed by Reuters predict for next September.

These interest rates are closely followed by crypto investors. Indeed, a fall in rates reduces the returns on safe havens like bonds, pushing more investors towards riskier, but potentially more profitable assets like Bitcoin.

However, the road to $100,000 could be bumpy. Mr. Peterson points out that markets are often “stable and volatile” between September and October, and that uncertainty will be even greater this year due to the US elections on November 4.

For his part, crypto analyst Scott Melker, aka “The Wolf of All Streets”, remember that a Fed rate cut is not always good news for the markets. “Rate cuts generally precede significant declines,” he warns.

If Timothy Peterson's analysis is verified, Bitcoin could experience a meteoric rise towards $100,000 by the end of 2024. But for this to happen, high-yield interest rates in the United States will have to fall significantly and that the market gets through the period of uncertainty linked to the American elections without any problems. The next few months therefore promise to be decisive for the future of the queen of cryptos.

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