BitcoinBTC +3.3% and cryptocurrency prices have rebounded this week, climbing despite a serious U.S. ban proposal.
The bitcoin price, up almost 10% on this time last week and back above the closely-watched $20,000 level, has rallied despite multiple price crash warnings. The price of other top ten cryptocurrencies—including ethereum, BNBBNB +1.1%, XRPXRP +0.5%, solana, cardano and dogecoin—have also surged as ethereum’s long-awaited upgrade gets underway—something some think could be disastrous for bitcoin.
Now, as the U.S. Federal Reserve mulls another interest rate hike in September, one analyst has predicted it’s “only a matter of time” before the Fed changes course—with bitcoin “poised to be a primary beneficiary.”
The bitcoin price has rebounded this week, boosting the price of other top ten cryptocurrencies … [+]
AFP VIA GETTY IMAGES
“Bitcoin is a wild card that’s more ripe to outperform when stocks bottom, but transitioning to be more like gold and bonds,” Bloomberg Intelligence commodity analyst Mike McGlone wrote in a report this week, adding there is a “strong headwind” affecting high-risk assets as the Federal Reserve continues to tightening monetary policy to drive down inflation.
However, Federal Reserve and market watchers are increasingly confident the Fed will succeed in its war against inflation within coming months. Fed officials are currently weighing whether to go for a third straight 75-basis-point interest rate hike at the September 20-21 policy meeting or a 50-basis-point rise. Next week, the latest U.S. consumer price inflation (CPI) data will show whether the Fed’s earlier interest rate hikes have slowed price rises.
“It’s typically a matter of time for the Fed funds gauge to flip toward cuts, and when it does, bitcoin is poised to be a primary beneficiary,” McGlone wrote.