Dear Readers,
Bitcoin Price (BTC) briefly touched $60,000 today, driven by multiple factors including U.S. economic data and increased institutional investments. Here's a closer look at what's contributing to Bitcoin's rise.
Source : Coinpedia Markets
U.S. Economic Data Boosts Bitcoin Sentiment
The U.S. Producer Price Index (PPI) data showed a 0.3% increase in August, slightly exceeding the 0.2% estimate. This rise indicates persistent inflationary pressures.
The core PPI, excluding food and energy, also rose by 0.3%. Over the past year, the headline PPI increased by 1.7%, and the core PPI climbed by 3.3%.
These inflation figures have bolstered hopes for a Federal Reserve interest rate cut, a potential boon for Bitcoin.
Federal Reserve Rate Cut Odds Rise
Chris Larkin from Morgan Stanley highlighted that recent PPI data aligns with consumer inflation (CPI) trends. Combined with jobless claims data, this has increased the likelihood of a 0.50% rate cut by the Fed.
Analysts at Citi predict a 1.25% rate cut in 2024 as inflation slows and labor market conditions improve. Lower rates could encourage investors to turn to Bitcoin and other risk-on assets for better returns.
Institutional Investors Drive Bitcoin Demand
MicroStrategy, led by Michael Saylor, bought 18,300 more Bitcoin, worth $1.11 billion, solidifying its position as the largest corporate holder of BTC.
Marathon Digital Holdings, a key player in Bitcoin mining, added over 5,000 BTC in the past month, bringing its total holdings to 26,200 BTC, valued at $1.5 billion.
Renewed Confidence in Bitcoin ETFs
Spot Bitcoin ETFs recorded $140.7 million in inflows this week, rebounding from last week's outflows. This indicates growing investor confidence in Bitcoin’s potential.
Ric Edelman, founder of The Digital Assets Council of Financial Professionals, has set a long-term price target of $420,000 for Bitcoin, signaling strong bullish sentiment among industry experts.
Is Bitcoin Poised for More Gains?
With inflation data, rising institutional interest, and expectations of Federal Reserve rate cuts, Bitcoin’s price surge may not be a one-time event. As macroeconomic conditions continue to favor risk-on assets, Bitcoin could be primed for further gains.
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